Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer (ex HMRC and have my own accountancy business)
First I will advsie the travel costs to and from place of EMPLOYMENT are not allowable - these costs should have been borne by you personally and not claimed as a business expense as not wholly and exclusively arising in the course of performing your duties, but incurred to enable you be at a place where you performed said duties.
But tell me more about the travelling expenses you incurred to undertake the self employment freelance work as your travel home from London would be a cost you should suffer yourself but travel costs once back in Devon to perforn freelance work would be allowable.
Also if you have no actual room set aside for the self employment which then should have been restricted for the actual time spent using that room then the third of household expenses is excessive - and whilst this might be cheaper then renting an office you can only have whats fair in terms of out of pocket expenses.
So perhaps you could advsie me
1) where do you stay weekdays when working in London with employment and do you make good these costs yourself
2) How often do you actually travel home for weekends in Devon and how many of those weekends see you undertaking freelance work
3) What travel do you actually incur in Devon once you are back OR is all freelance work undertaken from the Devon home
4) Have you a room set aside in Devon and if so how many hours do you actually spend in that room for freelance work
If you do not have a room set aside, then what amounts and individual claims of costs have you been claiming a third of , and why a third- where did this ration come from ?
Any other information you feel is irrelevant (and I must advsie your ill health sadly has no bearing at all on your expenses, these are merely based on fact and actual costs you incur to perform the work
Please also expand on what you mean when you state " wants to capitulate to HMRC on every point" this is the only way, we as accountants can help you sort the wood from the trees in terms of genuine expenses due -
I look forward to a response
Thanks for your response and the additional information
1) then the costs to travel to and from Devon are not permitted as travel expenses either for employment or self employment as each of these journeys merely put you in a position to be ready to attend employment/self employment
Only that trivial travel whilst in Devon is allowable I am afraid (so nor is the car travel from your friends house to Dartmoor)
And any rental costs for the prefab I am afraid also would not be allowable, nor any food/drinks during the time in London as we all have to eat to live
2) The amount of expenses you claiemd for the house is way over an acceptable amount - in this room you set aside you at a push could have claiemd the room ratio (so if you have 5 rooms in the property then 1/5th) which then would need to be restricted by the actual time spent there - but only for heating and lighting - nothing else - the fact you then conducted interviews in the living room/kitchen as well as your research and reading - would as an alternative allow £3 per week claim - but I stress this would be either/or and HMRC would in fact argue against the room set aside as it seems you did nothing but store books and files here but not actually conduct any actual work there) So had I been your accountant I would have advised just £3 a week
But might I advsie even had this room be used for all aspects of your freelance work a third was excessive and rent should not have been claimed nor council tax - as you incur this personally not as running a business and a small amount for tea and coffee - the ratio of additional expenses used for meetings/interviews for your "clients"
Sadly our brain power costs nothing to run in the business expenses world - so nothing to claim there I am afraid.
If you wish to wait until you are back with your papers and a better mode of communication then lets do that. But I fear the accountant that represented you has claimed incorrectly - and there (in my humble opinion) no appeal route here as you cannot uphold arguing the legitimacy of these over-inflated expenses claims 0 and I am sure you can appreciate I would not be doing my job property is I didn't advsie as such.
So do let me know if I can assist further - and if easier once you are with your papers, we do offer a telephone service. although I am afraid this does incur an additional charge (of which all accountancy and Just Answer costs are an allowable business expense!!)
But if you have enough input - then it would be appreciated if you would rate me for the level of service I have provided *or click accept) as this ensures Just Answer credit me for my time (but we can still continue to communicate of you have any additional support with this)
I will await the further clarification/questions you need from the answers I have provided
Thanks for the further information - which I am sure you will not object is now proving to be far more involved than perhaps your first post suggested.
But to help you see if there is an appeal still to be established - and whether you wish to take this forward lets look at each of your points raised and please note I will play devils advocate- as I will use HMRC legislation to counter argue your points (which is the response they will make)
a)) What precedent was set ? HMRC do not appear to have agreed this precedent prior to this current position - and whilst I agree there is a claim to be had, not as excessively as the one you had made over the years (even if this was then inflated with the accountants recommendations) so please do expand - where you feel your arguments lay
b) The travel to and from London to Devon is commuting for the reason provided, each journey put you in a position to commences the work or self employment duties, but neither were undertaken IN THE COURSE of duties - so only costs incurred when in Devon undertaking freelance work (so after you arrived and before you left) could ever be considered in the first instance - so under what legislation do you feel an argument could overturn this
c) I am afraid this is not a valid argument - whilst its admirable that you push on to earn a living despite the difficulties you face, this is a personal attribute that is testimonial to you as an individual and not a position that could be used to change the facts and legislation.
If you wish me to spend time looking at Andrews Heath letter and seeing if I can find any successful way to counter argue - then I am afraid I will have to send an additional services request to charge an additional fee- as this will be on a par with the tribunal work I offer my clients with my own practice, and they are time consuming. The only difference (which is then reflected in the price) is that I cannot represent you as per our agreement with Just Answer that all work is undertaken through their services and that I will try and establish pointers to forge arguments - but I will also be candid and honest where there are none to be had.
OR I can offer a telephone service (an additional fee comes into play I am afraid) I can then review the correspondence and we set up a mutual time - where I can provide my contact details and we can discuss this and debate the issues out and see if we can find a pathway for you with this.
let me know how you might like to proceed, or if you require any additional help
As you have access to funds then worst case scenario (if all other avenues have been exhausted or no payments are forthcoming) the yes they can ask that the pension fund be used to pay the amounts owed.
However - if the pension pot is not at a stage where it is viably available (you are of pension age) then they cannot take anything from it.
Yes down draws are income and liable to tax (Only the initial 25% of a pot at the appropriate time can be taken tax free)
I have not read any of the correspondence form HMRC as I have gone into this question answering what you asked, and now you are asking me to get involved in direct communications and HMRCs findings (this is wwere I refer to the fact this is getting more complex as you now are asking me to act in a official capacity with real time information, rather than offer advise and information based on your original post)
If you wish me to read his findings and conclusions and comment on them then this is where the additional services and costs some into play I am afraid (this is clearly Just Answers policy)
If you wish me to proceed, then I can send an additional services request unsuspecting a fee I feel fair to
1) Look at the correspondence and
2) Comment on those relating to travel to and from Devon and also the working from home costs and how they tie win with the legislation and advsie already given and
3) Whether I feel there is any scope of arguing these points.
This would then take this onto being a good half how to hours work - along with any potential follow up questions so I can send a proposal which you can choose to accept or not - does that sound reasonable
But I do fear you will not like my findings as I can assure you (as ex HMRC) that they do not make the rules up as they go along - but they do I accept make mistakes, but so far this does not seem to be the case where, as I gave you my expert answer (based on legislation) from the beginning of this Q & A exchange and this has not deterred so far, and if there was ANYWAY I could better this for you - I most certainly would
Just because HMRC did not challenge that point of home expenses before does not set a precedent if they reviewed it AND then accepted it - that DOES set a precedent and your arguments towards what has previously been allowed, such as trips to Frankfurt - is completely different as this was not from one place of abode to another -
Your heath and the need to work as you did has no bearing - might ir surprise you to learn I have a condition that prevents me from holding down standard employment - so self employment allows me to work at night - or stop when I need to - so I do not always go to my office away from home and often divert calls and work to my home - YET my travel to and from the office space I use is NORMAL Travel and I cannot claim as an expense - but I have to do this so I can manage my workload and clients - and I work from home nearly all the time now - Would this afford me a different business expense claim- no it does not so I work as per HMRC ruling ONLY and claim only what is a genuine business expense until such time that might incompletely change ans then I will revisit what is then allowable (so I spend at least 50 hours a week working from home and claim £3 a week!
I do not usually divulge my personal life to customers but I need you to see I DO understand
I shall send you an additional services request -