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Self Assessment - Accountancy fees allowable expense?

  • Member
  • Practice Licence
  • 31 posts
  • # 119903

Hi,

I am sure this has been asked before but it is something my clients always ask me.  Can they claim my fees I charge them to complete their self assessment returns as an expense?

Up to now I have always said no as I am sure I have read this somewhere that they are not classed as an allowable expense.  However, when I've looked it up again I can't seem to find any specific advice on this matter.

Thanks,

Lisa

  • Member
  • Practice Licence
  • 1 post
  • # 119907

Hi Lisa,

 

I saw this somewhere this week but now cant find it.  Clients can claim your bookkeeping cost for the normal transactions but cant claim the cost of an accountant or bookkeeper to create and submit a self assessment. 

 

Im sure its in my L4SAT text book .

  • Member
  • Practice Licence
  • 46 posts
  • # 119914

I find it helpful to think in terms of - is this a business cost and does it pass the "wholly and exclusively for the use of the business" test.

 

Also some in the industry will charge for the accounts/bookkeeping work and throw the SA in for "free" - but don't tell anyone......

  • Member PM.Dip
  • Practice Licence
  • 13 posts
  • # 120078

Here's an extract from HMRC's Private Personal Expenditure:- 

25. Have the profits been adjusted for any professional fees, paid by the business, for personal tax matters?

Risk
Proprietor’s and partners’ personal tax returns are often closely linked with the business. Only the business element of professional fees is allowable. Professional fees relating to the preparation or computation of personal (non-trade) liabilities are not allowed in computing the business profits, for example the computation of personal capital gains. In computing the profits assessable, it is the practice to allow the normal professional fees incurred in preparing accounts or accounts information and in assisting with the self assessment of tax liabilities.

Mitigation
When there are personal (non-trade) elements of professional fees identify the business and non-business elements of the professional fees and ensure that only the business element is claimed against taxable profits. Effective from 6 April 2018 22 Additional professional fees arising from an HMRC compliance check where this reveals discrepancies and additional liabilities which arise as a result of careless or deliberate behaviour will not be allowable.

 

SOURCE: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/710076/Private-Personal-Expenditure.pdf

 

Hope that this helps...

Mark

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