Bank Statements in lieu of receipts to show expenditure to offset exp's against tax.

[Tomo1971]

Received my settlement 'offer' this week - around £20k with interest - obviously a lot better than many folks and stories I have read in the past on here and other sources. £20k is manageable I feel if allowed time to pay.

However, when I submitted the request for info and possible settlement I asked HMRC if I could off set any 'expenses' that were paid out while I was in the schemes. One of the reasons I joined the scheme, naively, is that there was no requirement to keep receipts (words of the highwayman, sorry, accountant) that signed me up - so of all the thousands of pounds spent (van purchase, fuel, accommodation etc) that I would have been able to use to offset the tax bill if employed/self employed I cannot do as no receipts.

However, I do have electronic bank statements (with a fee I could get paper ones from the bank) and I do have some other documents that offer some provenance to those statements - IE, I have my old schedule from the client telling me where in the UK I would be working - these tie in with fuel purchased from a garage in the same area. I paid out £8000 on a van for the period (on HP so clearly seen on the statements) - the MOT history for the van show it doing almost 100k miles in my ownership - this alone at 45p/25p mile = £29,000 of expenses in fuel.

In my settlement offer, HMRC say that I would need receipts for them to look at this - is there any precedent anywhere that would allow bank statements (backed up with other information, 3rd party statements if so required) to be used as proof of expenditure?

[kentishlad]

Received my settlement 'offer' this week - around £20k with interest - obviously a lot better than many folks and stories I have read in the past on here and other sources. £20k is manageable I feel if allowed time to pay.

However, when I submitted the request for info and possible settlement I asked HMRC if I could off set any 'expenses' that were paid out while I was in the schemes. One of the reasons I joined the scheme, naively, is that there was no requirement to keep receipts (words of the highwayman, sorry, accountant) that signed me up - so of all the thousands of pounds spent (van purchase, fuel, accommodation etc) that I would have been able to use to offset the tax bill if employed/self employed I cannot do as no receipts.

However, I do have electronic bank statements (with a fee I could get paper ones from the bank) and I do have some other documents that offer some provenance to those statements - IE, I have my old schedule from the client telling me where in the UK I would be working - these tie in with fuel purchased from a garage in the same area. I paid out £8000 on a van for the period (on HP so clearly seen on the statements) - the MOT history for the van show it doing almost 100k miles in my ownership - this alone at 45p/25p mile = £29,000 of expenses in fuel.

In my settlement offer, HMRC say that I would need receipts for them to look at this - is there any precedent anywhere that would allow bank statements (backed up with other information, 3rd party statements if so required) to be used as proof of expenditure?

I've sent in my mileage figures, and also my accommodation costs. I may still have my toll receipts and receipts for subsistence if it comes to it. Like you, I was advised I wouldnt need them as this was taken into consideration with the scheme but I kept a lot of them anyway... however I split with my partner due to all this, and paperwork may have been 'binned' so subsequently I may have to rely on bank statement also... which thankfully I do have

[Tomo1971]

I've sent in my mileage figures, and also my accommodation costs. I may still have my toll receipts and receipts for subsistence if it comes to it. Like you, I was advised I wouldnt need them as this was taken into consideration with the scheme but I kept a lot of them anyway... however I split with my partner due to all this, and paperwork may have been 'binned' so subsequently I may have to rely on bank statement also... which thankfully I do have

So this is my question, is there any precedent or case law that suggests that one could use bank statements as proof of expenditure - when analysing the statements I did err on the side of caution and have matched many transactions to localities where I was working. I am still in touch with those that gave me the locations so they could write / testify to the fact I was working all over the UK.

[kentishlad]

So this is my question, is there any precedent or case law that suggests that one could use bank statements as proof of expenditure - when analysing the statements I did err on the side of caution and have matched many transactions to localities where I was working. I am still in touch with those that gave me the locations so they could write / testify to the fact I was working all over the UK.

Im honestly not sure mate, petrol may be one thing as Ive worked as an PAYE employee for several companies and only had to give my journeys in excel format and not receipts for a few. Toll charges I have all electronic transactions. Accommodation I kept receipts or can get copies. Subsistence would have to rely on bank statements but thats the one Id have problems with to be fair

[Delendog]

Im honestly not sure mate, petrol may be one thing as Ive worked as an PAYE employee for several companies and only had to give my journeys in excel format and not receipts for a few. Toll charges I have all electronic transactions. Accommodation I kept receipts or can get copies. Subsistence would have to rely on bank statements but thats the one Id have problems with to be fair

I thought subsistence could be claimed normally based on hours away 1, meal £5 two meals £10?

[webberg]

The standard normally imposed by HMRC for claiming expenses as an employee is very high. There are also time limits as to how far back you can go, usually 4 years from the end of the tax year.

Here though we are looking at an extra statutory settlement which is, in theory, outside the usual rules and HMRC will have some discretion as to whether to allow claims or not.

I think therefore that any reasonable estimate should be enough but do not be surprised if HMRC say, too late, too little evidence, not within the rules.

[kentishlad]

The standard normally imposed by HMRC for claiming expenses as an employee is very high. There are also time limits as to how far back you can go, usually 4 years from the end of the tax year.

Here though we are looking at an extra statutory settlement which is, in theory, outside the usual rules and HMRC will have some discretion as to whether to allow claims or not.

I think therefore that any reasonable estimate should be enough but do not be surprised if HMRC say, too late, too little evidence, not within the rules.

aww... heres me thinking I could go back twenty years. Re-open a tax return, add on the loan, and expenses and resubmit... surely that would have been easier

[webberg]

Well, like I said, we are in extra statutory territory here and who knows what might be or not be allowed?

[Tomo1971]

Thanks for the comments.

Funny how we cant go back more than a few years but HMRC can.......

Anyway - worth a try I guess!

On another note, related to the expenses & receipts - the accountant that promoted the scheme should be hung, drawn and quartered - I would have been far better off if I had gone as Ltd Co - the very thing I went to see them for but got steered towards the EBT. Granted, they cant see the future but should have offered better advice under my circumstances!

[LandRover]

Thanks for the comments.

Funny how we cant go back more than a few years but HMRC can.......

Anyway - worth a try I guess!

On another note, related to the expenses & receipts - the accountant that promoted the scheme should be hung, drawn and quartered - I would have been far better off if I had gone as Ltd Co - the very thing I went to see them for but got steered towards the EBT. Granted, they cant see the future but should have offered better advice under my circumstances!

Look at joining LCAG, as many are looking at litigation against advisers on a no-win no-fee basis.