Are old expense receipts still valid?

Are old expense receipts still valid?

14:18 PM, 8th February 2021, About A year ago 18

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Hi, I have found some old maintenance/repair (not improvement) receipts for my BTL property which date back to 2012.

My first question is: can I use them on my next self assessment tax return or have I lost out because I can you only claim for payments made in the same financial year?

Secondly, when selling a BTL property does anyone have any advice as to the best way of documenting the cost incurred for improvements over the years so as to correctly claim against CGT and also be ready should the tax man want evidence (does this ever happen?)

Many thanks.
LP



Comments

Beaver

17:20 PM, 8th February 2021, About A year ago

Reply to the comment left by at 08/02/2021 - 16:18
I think the area is greyer than you make out; it's not always possible to neatly separate repairs from improvements and sometimes HMRC even accepts an apportionment between the two provided it's done on a reasonable basis.

So it still depends upon the nature of the expense.

Puzzler

6:52 AM, 9th February 2021, About A year ago

In terms of documenting: a spreadsheet and the supporting invoices/receipts should suffice

Michael Barnes

22:52 PM, 11th February 2021, About A year ago

does anyone have any advice as to the best way of documenting the cost incurred for improvements over the years so as to correctly claim against CGT and also be ready should the tax man want evidence (does this ever happen?)

You should maintain financial records for your business, preferably double-entry book-keeping.

When you incur an expense it should go into the appropriate account, eg "Revenue Expenses", "[Property X] Capital Improvements". It is then easy to determine the amount spent on capital items when you come to sell.

Each receipt/invoice should have a unique identifier allocated by you, and that reference should annotate the entry in your books. (I use identifiers of the form "YY/n" where "YY" is the last 2 digits of the year the tax year ends in, and "n" is a sequential number starting at 1 for each FY. I then file each receipt/invoice in numerical order)

Jessie Jones View Profile

12:57 PM, 13th February 2021, About A year ago

Reply to the comment left by at 08/02/2021 - 15:13
I can't imagine HMRC allowing you to claim this. We only need to keep our accounts for 7 years, so to magically produce an invoice from 8 years ago would enable anyone to claim the same expense repeatedly.
No accountancy qualifications here; just saying.

silversurfer2017

14:28 PM, 13th February 2021, About A year ago

Reply to the comment left by Jessie Jones at 13/02/2021 - 12:57
And risk being prosecuted for fraud??

Jessie Jones View Profile

17:01 PM, 13th February 2021, About A year ago

Reply to the comment left by at 13/02/2021 - 14:28
That was kinda my point. They aren't going to allow a situation whereby fraud could be so easily committed.

silversurfer2017

19:48 PM, 13th February 2021, About A year ago

Reply to the comment left by Jessie Jones at 13/02/2021 - 17:01
Self assessment is based on trust and honesty. HMRC works on the basis that most people are honest and only claim for expenses properly incurred in the running of their business. They also assume that most people fully declare all the income that their business produces. For those that want to cheat the system and commit fraud it is just as easy to under-declare income every year, every other year, or every 8 years. You only have to keep tax records for 6 years - I keep 7 years because of gifts made and the 7 year rule on gifts for inheritance tax purposes.. Do you really think that HMRC only keep records for 6 or 7 years? Don't you think their computers will pick up this odd amount of expenses, which must be quite a large amount to make it worth doing, the same amount of which comes up every 8 years?
As I mentioned in an earlier post the taxpayer has only got to keep 6 years tax records but HMRC can go back as far as it wants to and prosecute in cases of deliberate fraud. It is not a case of after 6 years you have 'got away with it' and are in the clear.

silversurfer2017

19:58 PM, 13th February 2021, About A year ago

Reply to the comment left by Jessie Jones at 13/02/2021 - 17:01
'HMRC will investigate further back the more serious they think a case could be. If they suspect deliberate tax evasion, they can investigate as far back as 20 years. More commonly, investigations into careless tax returns can go back 6 years and investigations into innocent errors can go back up to 4 years.'

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