mandelbrot
Registered User
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Well lets be clear about the context here, as it's narrower than overheads generally:The Revenue south West letter to the ITI concerned itself pretty much exclusively with contractors with unusually high overheads, and concluded that a % of same were bogus, hence all were being invited to "clarify" their position.
And if you do rent an office, they will (1) claim that your overheads are "unusually high" and seek to audit you on that basis...
If I was an audit manager I'd brain anyone who would attempt to justify issuing an audit letter on the basis solely of "unusually high" overheads - I'd be amazed if that happened anymore - much more likely they'd raise an aspect query and ask to see a full set of accounts, and if still unhappy a copy of the lease.
So have the registered office somewhere else?
The way I read the scenarios, my travel from my office/home to clients place of business would be disallowed.
So are you saying there's no such thing as a person's normal place of work??
That is a strawman question. My point is that concepts like "normal place of work" are becoming increasingly fuzzy as work patterns, communication media and lifestyles evolve. In some cases, pre-existing practices and customs are being utterly turned on their head.
For example if I need to talk to a client this morning, my default action will be to call them on their mobile as I probably won't catch them if I call their landline.
Or to put it differently, business people no longer sit in offices waiting for the phone to ring.
This wasn't the case 10-12 years ago when many people didn't even have a mobile phone let alone an online presence. Yet Revenue's logic and terminology have not evolved accordingly and are still rooted in 1980's norms of a business person turning up at an office in the morning, taking lunch break in the middle of the day and going home once their 7.5 - 8 hours work is done.
In terms of my audit I am lucky my expenses are low and the Revenue even suggested I was under claiming. This was quickly followed by 'it doesn't matter if your claims are low receipts must be produced or the expenses are not admissible'. I have a bit of chasing up to do to get my hands on some receipts.
Have you sought expert advice on this? If so, has your advisor concluded that the inspector is acting within their powers in retrospectively demanding receipts for expenses claimed in compliance with IT51/IT55? In such case, have they outlined the precise basis for their opinion?
Are you operating through a limited company? If so, IT51 & IT55 apply and these don't force you to have receipts for every single expense item. If you're a sole trader, you must have such receipts.
Are you operating through a limited company? If so, IT51 & IT55 apply and these don't force you to have receipts for every single expense item. If you're a sole trader, you must have such receipts.
My comments were in response to this: "it doesn't matter if your claims are low receipts must be produced or the expenses are not admissible'". IF this is an accurate summation of what the inspector said, then there is a possibility that they are exceeding their powers, a qualification which I noted while making the remarks.
So there is a company vehicle, and the expenses in question are the running costs of this vehicle which the company has paid?
In which case what the auditor has said about the requirement for receipts is entirely correct. How were the expenses calculated if not on the basis of receipts?
Has the company accounted for a benefit-in-kind on you as director for personal use of the vehicle?
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