Poor records

Claim for sideways loss relief

The taxpayer reported that he had begun a self-employed consultancy business in 2009-10. He was also a full-time employee of a bank. He claimed to offset losses from his self-employment against his employment income. HMRC enquired into his 2010-11 tax return. It disallowed the losses on the basis that the business was not commercial and imposed a penalty. The taxpayer appealed saying he had incurred expenditure on renting an office and the cost of his car telephones internet accountancy and software.

The First-tier Tribunal agreed with HMRC that there was insufficient evidence of rent paid on a serviced office. On motor expenses the taxpayer had provided no proof to show that he had used his car for his business. The tribunal reached the same conclusion on all other expenses claimed other than £2 000 accountancy charges. Given reported...