Expenses allowed

HMRC opened an enquiry into the taxpayer’s 2004/05 tax return querying his expense claim of £19 400 and deciding the amount should be added to his profits.

The taxpayer refused to sign the department’s revisions because it had not taken into account the £19 400 he had paid to subcontractors for work on his business computer equipment.

The Revenue issued a closure notice saying said the taxpayer had verbally agreed its figures. The taxpayer appealed.

He said much of the confusion arose because HMRC had lost his original return and the copy submitted by his accountant contained information from the wrong accounts.

Also the first Revenue officer dealing with enquiry appeared to accept his expense claim but the person who took over did not.

The First-tier Tribunal accepted invoices showing that the £19 400 related to payments to subcontractors for work on IT equipment ...