Not claiming expenses

[jim_0525]

Self-employed tax return.

Is it OK not to claim some expenses? I assume it is, but thought I'd check.

The reason is that I'm currently shifting money into my pension, and last tax year I shifted a bit too much (more than my draft self-assessment profit). An easy fix would be for me to push my self-assessment profit up a bit by not claiming some expenses.

 

[UK Contractor Accountant]

s it OK not to claim some expenses? I assume it is, but thought I'd check.

ok for who? HMRc wont give two hoots if you did it.

Technically fraud IMO - misrepresenting your true income.

Self Assessors had a habit of doing this when applying for a mortgage to bump up their income,

sections 1 & 2 Fraud Act 2006.

 

[Newchodge]

Self-employed tax return.

Is it OK not to claim some expenses? I assume it is, but thought I'd check.

The reason is that I'm currently shifting money into my pension, and last tax year I shifted a bit too much (more than my draft self-assessment profit). An easy fix would be for me to push my self-assessment profit up a bit by not claiming some expenses.

? If you don't claim expenses are you not reducing your profit?

 

[jim_0525]

ok for who? HMRc wont give two hoots if you did it.

Technically fraud IMO - misrepresenting your true income.

Self Assessors had a habit of doing this when applying for a mortgage to bump up their income,

I don't plan to represent my profitability to anyone apart from HMRC, but that's something to bear in mind.

 

[UK Contractor Accountant]

profitability to anyone apart from HMRC,

pension company!
\

 

[WaveJumper]

So just to clarify have you shifted 100% of your salary into a pension pot and that was over the 40k limit. Or did you shift this money before confirming what you had actually earn't.

 

[jim_0525]

So just to clarify have you shifted 100% of your salary into a pension pot and that was over the 40k limit. Or did you shift this money before confirming what you had actually earn't.

It is less than the 40k limit, but I transferred a bit more into my pension (and claimed the tax relief/top-up) than my draft profit figure (if I claim every allowable expense).

 

[UK Contractor Accountant]

don't you have any unused pension allowances carry forward from last 3 years you can use?

 

[jim_0525]

don't you have any unused pension allowances carry forward from last 3 years you can use?

Aha, I didn't know that was a thing. Thanks, I will look up the rules.

It should work for me because the previous 2 years I under funded the pension by enough to cover this years excess in funding.

Do I need to do anything? or will HMRC see that I'm within the rules? Or does no one even look at the figures unless someone is audited.

 

[WaveJumper]

If you have unused allowance from previous year as above you should be fine if not you may just have to pay back some of your tax relief to HMRC just check out their website for more details it all on there

 

[jim_0525]

OK, so unfortunately there is no carry forward of previous unused parts of the earnings limit or the £3600. It's only the annual allowance £40k that carries over.

I actually knew and forgot that already because I looked it up when I started paying into this pension 5years ago.

 

[STDFR33]

? If you don't claim expenses are you not reducing your profit?

Usually when a business has less costs, the profits are increased.

 

[neilsolaris]

? If you don't claim expenses are you not reducing your profit?

If you didn't claim your expenses, wouldn't this increase your profit, not reduce it?

 

[Newchodge]

If you didn't claim your expenses, wouldn't this increase your profit, not reduce it?

Yes, brain fade.

 

[neilsolaris]

It's ok, you're in good company, it happens to me on a daily basis!

 

[Adam93]

OK, so unfortunately there is no carry forward of previous unused parts of the earnings limit or the £3600. It's only the annual allowance £40k that carries over.

I actually knew and forgot that already because I looked it up when I started paying into this pension 5years ago.

Correct - the tax relief for personal pension contributions is capped at 100% of your net relevant earnings for any given tax year (or £3,600 if lower). No carry forward available. You can contribute more than this, but no basic rate tax relief can be claimed by the pension fund on amounts over your net relevant earnings.

The £40k annual exemption is a separate and totally different restriction and only unused annual allowance can be carried forward.