Corrections during enquiries

[j.ragg]

Hi all,

Does anyone have insight into how the enquiries or investigations work?

For example, in a hurry to submit, I put down figures of my cash basis expenses in the wrong categories in the breakdown. The enquiry asks me to show all the receipts of expenses and they realise it is an allowable expense but put it down as a wrong thing - does that get your penalty?

My accounts are simple cash and card income, with records of what came in and how and when. Expenses are mostly on the card, some by cash. I ceased trading due to the impact of COVID, no SEISS or employment support but some small business grants by the council. I have shown them as income and accounted for them. I have included the value of any assets or goods that I had when I closed as income. But I don't think I have got my categories correctly when filing self-assessment when looking at them retrospectively. Is it worth getting an accountant to amend my self-assessment before HMRC thinks there are errors and sends an enquiry?

Thank you in advance!

[pawncob]

If they're all allowable expenses, then it doesn't matter. The Profit remains the same, so no penalty will apply.
But, I'd recommend an accountant to deal with any Revenue enquiry.

[j.ragg]

Thank you! I *think* they are all allowable expenses and it doesn't add to profit. Most of the 'income' was cash from selling of assets and counting my assets and converting the value to receipts. Even then, my expenses are more when I add all my assets that I sold, plus a value for what I couldn't sell before shutting down. So if some of the expenses are deemed non-allowable, I might still be far off from making any profits.

I am just unsure of what is let go as 'error' against 'carelessness' in such cases. I wish I had money for accountant when filing this assessment but retrospectively I feel like I should just borrow money now and get my self assessment amended by someone.

[bd6759]

A penalty for an incorrect return is based on the potential lost revenue. If the errors do not give rise to additional tax, there will be no penalty. As long as you are comfortable that you have declared the correct profit (or loss), then you are OK.