What can be confusing, however, is those times where an expense... most commonly, the receipt for an expense... is misplaced for several months, and only recovered in the next tax year.
While the expense may well have been incurred some time ago, it was still a valid expense paid for with after tax money, so you're perfectly entitled to want to claim it back against your taxable income.
What can be unclear is how exactly you offset the expense... after all, the tax returns for the previous year have already submitted to HMRC and umbrella company contractors will usually have their expenses offset in the same period as they were incurred.
So what do you do? Well, if you're working through an umbrella company, there is usually a system in place to handle historic or 'aged' expenses. It's very likely they've dealt with a similar situation with other contractors, so they're already familiar with this sort of thing. Most will simply reimburse the expense now, provided you can still produce the original receipt or some other form of evidence to prove the expense was incurred.
If you run your own limited company, are a sole trader or
partnership, or even where your umbrella company will not process
aged expenses, you have a slightly more involved option. Whether
you go down this route will depend entirely on whether you
consider the tax saving made by claiming backdated expenses
In general, if you have valid business expenses, they must be declared on your tax return for the year in which they were incurred. If the expenses should have been made on a previous year's tax return, you will need to submit an amendment to your return with HMRC through your local tax office.
If you have used online software to prepare your tax return in the appropriate year, many of them provide facilities to submit an amendment. It certainly not uncommon to make changes to a return in the period immediately following the tax year in question, but you can only make an amendment up to five years after filing your return.
Our best advice is to get on top of your expenses now. Setup a prudent filing system and ensure you collect receipts for all business expenses. Filing your tax return is an absolute doddle but making backdated changes is a pain. It may also attract the unwanted attention of HMRC, which is something you really don't want.
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Image: Lost Receipt by liber