Join us - Friday 29 September 2023

The Business Improvement Summit


Featuring 'Blog From the Dog


WTF!: HMRC do have a sense of humour after all!

Well, That’s Funny; It appears that the HMRC tax tribunal does have a sense of humour.

On a rare treat to the office, I pricked up my ears when I heard Jonathan burst out laughing about a tax case he had just read about.

Given the volume of his outburst, I assumed that HMRC must have been brought to heel by a tribunal finding in a taxpayer’s favour.

However, I was barking up the wrong tree and in fact it was a victory for HMRC; so why the laugh?

It turns out that an employed taxpayer had claimed that, over a 13 month period, they had undertaken 60,000 business miles on behalf of their employer and were claiming a deduction on their tax return for these business miles. They also produced a log in support of the claim.    

I have no idea if 60,000 miles is a lot but, on the basis of 1 gravy bone = 1 business mile, even I, as a hungry Labrador, would struggle to comprehend whether this was reasonable or not.

No, what was tickling Jonathan’s tummy was that:

  • HMRC had sniffed out evidence that the MOT reports (available from all good websites) showed that said vehicle had only travelled 38,358 miles in total!  Oh yes, even HMRC have computers and have heard of the Internet!
  • The taxpayer accepted that the mileage “discrepancy was unanswerable” but still wanted to chase rabbits and argue that a claim was due and that not all of the mileage claim should be written off
  • The tribunal was having none of it and disallowed the whole claim (which is as surprising as finding Labradors adore walks in the wood)
  • However, the tribunal also took a swipe at HMRC’s lack of detailed guidance on this area; and even managed to sneak a dog friendly term into their judgement; “a lacuna” which, as you all know, is a cavity or depression, especially in a bone! Who knew that they were followers of my 'Blog from the Dog' and were trying to jump on the gravy bone bandwagon!! 

And finally,

Because the guidance from HMRC was lacking, they threw the taxpayer a bone by stating that the £2,339.63 penalty for carelessness should be suspended. 

On a more serious note, the tribunal made the following comment:

“It is not hard to envisage that there may be many tradesmen who incur expenses who might benefit from guidance as to how to keep records and the types of evidence they ought to submit.”

So, what is the easy way to keep sensible mileage logs that will keep those hungry hounds of HMRC away from your door?

The answer lies in investing in an app such as Tripcatcher (other apps are available) that integrates perfectly with the accounting software produced by my friends at Xero. Follow this link to Tripcatcher that sets out the benefits of using a mileage capture app, which will not only keep the wolves from the door but may even save you money.

Although I am now considered to be an influencer in the accounting world, I have yet to receive any reward (hint, hint) from any software providers mentioned in my blogs. And, for those who read my last blog (I’ve paid the subcontractor gross and now I have to pay his tax as well?), you will know that gravy bones are desperately needed by me at the current moment in time!

If you want some practical advice on what can be claimed, why not get in touch with the lovely team at Rowdens! 

You can follow us on our Rowdens Facebook page and request to join our Rowdens Facebook Group. We're on LinkedIn too!

Oh, and if you think I make these things up, here is the link to the Tribunal’s decision.