How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • Go back-and-forth until satisfied
    Rate the answer you receive.
Ask Sam Your Own Question
Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 16422
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
16196420
Type Your Tax Question Here...
Sam is online now

09/09/2021 01:00 A self-employed trader (construction) has

This answer was rated:

09/09/2021 01:00A self-employed trader (construction) has too much Cost of goods (around £20 000) - materials (bricks, sand, bolts ...), the Revenue is £37 000. Are there any limits to the cost of goods figure?
Under s 34 IT (Trading & Other Income) Act 2005 (2) only any identifiable proportion of theexpenses are allowable. HMRC had allowed 68% of the cost of goods figure as supported by records.
Is he can put all costs of sales in a tax return or no.
Thank you

Hi

As long as all the costs of goods are relevant to the £37000 earned then that's acceptable as its whats reasonable

But if you had stock left over then this should not be claimed but carried over for the next tax year

Thanks

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 14 days ago.
Thank you so much sam, you are the best!!!

You are welcome

Thanks

Sam