A word of warning:

[Spiceskull]

My flatmate is an accountant, and the gist of our conversation is basically:

 

If you are self-employed, and you have been using a personal bank account to run your business, you need to consider the following:

 

Have you, at any time, offset bank charges against your business income as an expense? If so, then it would be prudent to raise this with your accountant the next time you complete a self assessment.

 

She doesn't believe that the IR will backdate any claim on your 'winnings,' but they will certainly offset any refund against charges you claim for the next time around.

 

It is also likely that as your bank will be pi**ed off, they will make a point of mentioning the refund in the event the IR request any information.

 

I'm no expert on this subject, and suggest that anyone in this situation discusses this with their accountant.

[Seminole]

Technically the correct way to do this is to treat the refunded charges as a reduction in expenses in the tax year in which you receive them, effectively increasing your tax bill. The maximum reduction would be the total amount you claimed over previous tax years. Any amount over and above this would relate to personal charges and can be ignored.

 

If you don't do this and you subsequently get turned over, sorry, investigated by the Revenue, they will not be happy. I'd be more concerned about this than the bank doing something nasty.

[Spiceskull]

...she also said that too...see, I said I was no expert. But I believe that a 'tax position FAQ' may be prudent once the new FAQ software is in place this weekend.

 

One of you guys (I think BF) told me that FAQs was out of bounds for non-mods...

 

However, if you require further info regarding the tax/accountancy regulations in respect of this...I think I might be able to persuade my flatmate to contribute...

 

Apparently (according to my flatmate) Martin Lewis's uncle is an accountant or similar, and he gives free advice on this sort of topic on MSE.

 

My suggestion is that he would most likely give the most informed advice for an FAQ...and I would ask him first...my flatmate is only part-qualified...HTH

 

An update:

 

It has been mentioned in other threads that the banks are actually giving more than the claim in some cases. If this is the case with you, and the self-employed issue relates to you, further info from my flatmate is this:

 

If your full claim was for charges offset against earnings, then this is the full amount the IR will offset against future earnings. Any surplus provided by the bank will be deemed yours, as you have not claimed tax relief against this surplus.

 

As always, you should seek the advice of a qualified accountant when considering these points, as tax law enters the equation to further complicate matters.

 

Adam.

[bram stoker]

Hello, my first post. I am the flat-mate.

 

I believe you may require a couple of paragraphs for your FAQ's. I'm part-qualified as ACCA and have more years experience in accounting than I care to consider, but here goes.

 

Everything has generally all been mentioned but to summarise:

 

"If you have claimed as deductible expenses against self-employed income any bank charges which are subsequently refunded, those refunds must be declared on the tax return pertaining to the period in which the refund was made.

 

This can be done by reducing the bank charges paid in the same period of the refund. If this results in a negative figure it can be entered as a negative cost or as other trading income received.

 

This will have the unfortunate effect of increasing your taxable profits (or decreasing your trading losses); and although you may not wish to do this, you are in fact required to do so by law.

 

If HM Revenue and Customs were to discover an omission of such a declaration, they will re-assess your tax liability and may impose fines, penalties and / or interest.

 

Note that any receipts from the bank in excess of that which you had claimed as a tax deductible expense will be treated separately as a personal receipt. How this excess is treated will depend on your personal tax situation.

 

It would be my recommendation that you seek the professional advice of a qualified accountant if you are in receipt of such refunds and are in any way unsure of how to treat them on your tax return."

 

Good luck to you all.

[BankFodder]

They are in already. (I'm very matinal)

[Spiceskull]

matinal

 

Matinal? Would that be the opposite of nocturnal? Never heard of matinal before...

[dilligaf]

http://www.thefreedictionary.com/matinal

 

the meaning of Matinal, I had to look it up too

 

Dilligaf

[Spiceskull]

hmmm - as i suspected. still, it is good to learn a new word every day.

[Spiceskull]

This topic was closed on 03/07/19.

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