# Form 12-revenue requesting more info



## guideanna (5 Oct 2011)

Hi all,

Sent my Form 12 tax return in  a couple of weeks back and just got a letter back from them requesting additional info.
One of these is computation of the capital allowances?

Just wondering how should i supply this, is it copies of the receipts, or a breakdown of the total and if so do i itemise each amount.
This was my first year filing so apologies if this is something i should know, should i have sent this in with the form12?


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## elcato (5 Oct 2011)

I think you just need to itemise each appliance/furnishings and put the value you perceive them to be beside them. The total claimed for should be the % value of this. Never asked for this before but perhaps your figures are quite high ?


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## Gervan (5 Oct 2011)

When sending in Form 12, the Revenue do not like to get extra bits of information. If they want to see documents, they will ask, as you found.


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## mandelbrot (5 Oct 2011)

guideanna said:


> Hi all,
> 
> Sent my Form 12 tax return in a couple of weeks back and just got a letter back from them requesting additional info.
> One of these is computation of the capital allowances?
> ...


 
Computation of the capital allowances simply means just that; not the receipts for the items, but a breakdown of what the capital allowances have been claimed for. If they still have a problem with your figures then they may ask for receipts / proof of the values you are writing down.

So it would look something like:

Fridge / Freezer 500
Dishwasher 350
Washing machine 350
Tumble dryer 300
Kitchen furniture 500
Sitting room furniture 1,000
Beds / mattresses 1,100
Carpets 1,200
------
Total furniture/fititngs: 5,300

2010 claim:

Opening tax written down value: 5,300 (assuming 2010 is 1st year)
Wear & tear claimed 2010: (663)
------
Closing TWDV: 4,637


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## guideanna (5 Oct 2011)

Thanks for the replies, yes it would have been a large amount since it was my first year and i had to have a new kitchen, new floors, tiles, and furniture put in to get it set up for renting.
Will get working on that tonight so and get an excel sheet done up with the breakdown of the total.

Thanks


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## Gekko (5 Oct 2011)

Some of that stuff sounds like it mightn't be eligible for capital allowances.


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## elcato (5 Oct 2011)

I don't think a kitchen as total is covered, only the white goods so be aware of this.


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## portstorm (5 Oct 2011)

what would be considered reasonable for a 3 bed house? 15 grand ok?
Also can stuff outside house be included - shed, decking, fencing, gates etc..?


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## WindUp (5 Oct 2011)

If you cant take it with you i wouldnt claim capital allowances on it - it's enhancement

Retiling and other such things could fall under repair expenses


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## Gekko (5 Oct 2011)

portstorm said:


> what would be considered reasonable for a 3 bed house? 15 grand ok?
> Also can stuff outside house be included - shed, decking, fencing, gates etc..?


 
What's reasonable isn't relevant...it's what was actually spent that counts.


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## guideanna (6 Oct 2011)

Well i put tiles and kitchen under capital allowances as i spent all of this before the place was rented to get it ready for rent. i was advised that capital allowances was whatever i spent to set up the place for rent?
Am i now looking at having to move things from capital allowances to expenses? Bathroom fittings, kitchen appliances, flooring, tiles, furniture-not as replacement but as new to furnish the place....am i after messing it all up now?
What will happen if i have?


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## mandelbrot (6 Oct 2011)

guideanna said:


> Well i put tiles and kitchen under capital allowances as i spent all of this before the place was rented to get it ready for rent. i was advised that capital allowances was whatever i spent to set up the place for rent?
> Am i now looking at having to move things from capital allowances to expenses? Bathroom fittings, kitchen appliances, flooring, tiles, furniture-not as replacement but as new to furnish the place....am i after messing it all up now?
> What will happen if i have?


 
Nothing to panic about, if they aren't happy with the claim they will tell you, and make the necessary changes - from the sounds of it some of the items you've claimed for wear & tear would be proper to expense (EDIT: to the extent that the expenditure wasn't pre-letting!), so this will reduce your rental income (or increase your rental loss to carry forward).

What should happen is they will set you straight going forward.


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## elcato (6 Oct 2011)

The initial cost of decoration, repairs setting up a place for rent is not allowed for CE. Any repairs done while renting or updating _between _rents can be claimed as expenses for the year in question. Furniture, fixtures and fittings and anything that can be removed simply without being an enhancement is regarded as CE. Tiles, most bathroom fittings, kitchen worktops, shelving would generally not be CE. My advice would be to list all you claimed for in getting to your initial figure filled in your form 12 and let revenue decide what you can and cannot claim for. They will simply seek a tax amount from you of the difference.


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## T McGibney (6 Oct 2011)

This sounds like a case where paying for proper tax advice in the first instance would have saved the OP a lot of worry and hassle, and probably some money too.


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## guideanna (6 Oct 2011)

How would it have saved me money? 

I'm pretty sure there was nothing i could have claimed for that i missed and i would have had to pay an accountant to do the forms for me which i was willing to take the time and worry of and do myself.
Looks like i may have mixed up what i can claim as CA and what should have been expenses but from previous post sounds like it's easily fixed.


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## T McGibney (6 Oct 2011)

guideanna said:


> How would it have saved me money?
> 
> I'm pretty sure there was nothing i could have claimed for that i missed and i would have had to pay an accountant to do the forms for me which i was willing to take the time and worry of and do myself.
> Looks like i may have mixed up what i can claim as CA and what should have been expenses but from previous post sounds like it's easily fixed.



You are in a better position than I to decide whether you may have saved money. That said, putting yourself in a position where you end up letting Revenue decide what you can and cannot claim is hardly the best way to maximise your deduction entitlements. Their business is tax collection, not tax advice.


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## guideanna (6 Oct 2011)

Yes but you said if i'd got someone to do it i would have saved a lot of money....just because i put some items that should have been under expenses as capital allowances doesn't mean the revenue is going to refuse to allow me claim these things, they will just allocate them under the correct heading. 

I don't feel i needed to hire someone to file a tax return i am capable of doing myself and like that, revenue have been quick enough to clarify the amount and i'm sure will be equally quick enough to correct the error if required. No harm done if so.

Don't think it's been that much hassle or worry at all and think i'll have saved money by doing it myself.


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## T McGibney (6 Oct 2011)

Relax, it was merely a suggestion. As I said, its your decision. 

ps I never said you 'would have saved a lot of money'.


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## guideanna (6 Oct 2011)

Thanks for your input but i'm only interested in my original query.

I'll be doing the form 12 myself next year too, no way i'd be paying some accountant when i'm fully capable of doing it myself. Waste of money...."in my opinion"!!


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## WindUp (6 Oct 2011)

Rough guidelines below -- but check revenues website for the detail 

Step 1 - split the expenditure between 
a.Enhancement - New Kitchen / New Bathroom / Garden Sheds etc
b.Capital Expenditure - Furniture & Applianes
c. Expenses - Repairs and maintenance, Insurance, Accountancy fees, etc 

a. Not allowable
b. Claim 12.5% per year
c. Pre letting is not allowed - the rest more are less is - see revenue guidlines for the non allowable stuff


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## Bronte (7 Oct 2011)

OP, just do up a list and see what revenue say.  If they disagree with something they will come back to you.  You may have incorrectly claimed something and you wouldn't be the first, but you didn't do so deliverately and revenue are not always the enemy so just supply what they want and see what they say.  .


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## Bronte (7 Oct 2011)

T McGibney said:


> Their business is tax collection, not tax advice.


 
I think that they have a duty to help taxpayers in filling out their tax returns and to explain their rules to tax payers ?


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## Gekko (7 Oct 2011)

guideanna said:


> Thanks for your input but i'm only interested in my original query.
> 
> I'll be doing the form 12 myself next year too, no way i'd be paying some accountant when i'm fully capable of doing it myself. Waste of money...."in my opinion"!!


 
You've shown that you're incapable of preparing and submitting an income tax return correctly and your "waste of money" comment is just ridiculous (especially coming from someone who is effectively "feeling around in the dark" when it comes to the taxation of rental income).

A tax consultant could and would save you money.  Plus the expense should be deductible.

As things stand right now, you've submitted a dodgy tax return to Revenue.  You're now a prime candidate for a Revenue audit where they'll examine every facet of your affairs.  This may turn up further errors and may necessitate a more costly engagement with an accountant.

"Waste of money" indeed...


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## hastalavista (11 Oct 2011)

While I think Geeko' wording a little harsh, I agree with the sentiment, especially when you read



guideanna said:


> How would it have saved me money?
> 
> I'm pretty sure there was nothing i could have claimed for that i missed and i would have had to pay an accountant to do the forms for me which i was willing to take the time and worry of and do myself.
> Looks like i may have mixed up what i can claim as CA and what should have been expenses but from previous post sounds like it's easily fixed.



Its easy to say mixed up now that the light is on, but supposing stuffing the F12 with the kitchen had slipped under the radar you would have ploughed on merrily.

Whether its easily fixed or not remains to be seen, as gekko has pointed out it could trigger a deluge as the new software they have just looks for this stuff.
In closing, if you are as arrogant and self-opinionated with the Revenue as you are here, they may not even use the jello


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## Bronte (12 Oct 2011)

hastalavista said:


> In closing, if you are as arrogant and self-opinionated with the Revenue as you are here, they may not even use the jello


 

Isn't that a bit over the top to a newish poster?


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## T McGibney (13 Oct 2011)

Bronte said:


> I think that they have a duty to help taxpayers in filling out their tax returns and to explain their rules to tax payers ?



That may be so, but I wasn't talking about that.

Btw Revenue's routine policy is to disown any 'explanations' they give to taxpayers, if any aspect of same later becomes contentious.


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## Bronte (14 Oct 2011)

T McGibney said:


> Btw Revenue's routine policy is to disown any 'explanations' they give to taxpayers, if any aspect of same later becomes contentious.


 
I agree with you there that's why it's always best to get it in writing from them if one can which is not easy to do.

And apologies if I misunderstood you.


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## T McGibney (14 Oct 2011)

No worries. Indeed, if advice is received in writing (eg email) it can be produced if needed at a later stage, but unfortunately if verbal 'advice' is disowned, its worthless.


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## guideanna (22 Oct 2011)

Just to come back to all you so helpful posters. Rang revenue to check they received my letter with the breakdown of CA claim. My application is now being processed and they said no further information will be required at this time.
IF they do require any further information i will obviously be more than happy to supply this....without any assistance from an accountant unless i see their service fit to attain.

Thanks so much for all the helpful posts. 

And to those judgemental name callers telling me i'm "feeling around in the dark" and "ridiculous"....well....that may be so, but for the moment i've answered what revenue required of me without the paid help of anyone so i think i did ok for a first timer!


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## Gekko (22 Oct 2011)

guideanna said:


> And to those judgemental name callers telling me i'm "feeling around in the dark" and "ridiculous"....well....that may be so, but for the moment i've answered what revenue required of me without the paid help of anyone so i think i did ok for a first timer!


 
You branded accountants "a waste of money", yet because of your refusal to seek professional advice, you've submitted a dodgy tax return and left yourself open to the prospect of a Revenue Audit.

You now know that the capital allowances claim that you submitted is questionable but you've allowed it to stand.  You are now therefore in "deliberate behaviour" territory (rather than "careless behaviour") for tax purposes.  You've a legal and moral obligation to correct your tax return, yet based on your most recent post it appears that you do not intend doing do.  It looks like we can now add dishonesty to the ignorance and stubborness reflected in your earlier posts.


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## guideanna (24 Oct 2011)

gekko in what way is my form 12 "dodgy"? I was asked to supply additional information, if revenue decide to audit me i have nothing to hide. if i made a mistake on the form listing expenses as capital allowances then i will put my hands up but i don't think this is the case and thus far revenue have not requested anything more from me.

Your telling me i've an obligation to correct my form but as far as i am aware i have everything in line so you telling me i'm dishonest is as well as ignorant and stubborn is way out of line.

In my opinion (as i've already said) to pay an accountant to fill in a form i'm capable of doing myself is A WASTE OF MY MONEY!!!! If i felt i wasn't able to do it i would have hired someone. You have got your knickers in a knot over this point as you keep coming back to it but there are no laws against filing my own tax returns and so much to your delight i'm sure i will stand by my decision. 
No problems so far, revenue are well within their rights to request additional information and also well within their rights to request further info or even audit my accounts. As i said i have nothing to hide.

Won't be replying again as i don't see the point when you've clearly made up your mind about me.....so here is the last word....enjoy it!!


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## Bronte (24 Oct 2011)

Whatever you have submitted to revenue, and especially when you have a doubt, you are entitled to put in a letter mentioning that you have a doubt in relation to x matter. Then you put the onus on revenue to clarify/refuse etc. You can actually call in to revenue and if you have documents get them to photocopy and stamp the photocopies so later if there is an audit that it is clear that you raised a doubt and that revenue were on notice.


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## T McGibney (24 Oct 2011)

Bronte said:


> Whatever you have submitted to revenue, and especially when you have a doubt, you are entilted to put in a letter mentioning that you have a doubt in relation to x matter.  Then you put the onus on revenue to clarify/refuse etc.  You can actually call in to revenue and if you have documents get them to photocopy and stamp the photocopies so later if there is an audit that it is clear that you raised a doubt and that revenue were on notice.



This is all news to me. There is an 'expression of doubt' box on the Form 11 which may be ticked as appropriate. (Many tax professionals believe that ticking this box exponentially increases the risk of Revenue Audit, although some sources contest this). Otherwise, Revenue generally discourage the adding of notes, addendums etc to tax returns.


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## Bronte (24 Oct 2011)

I don't know anything about the box on the form 11. But I have visited revenue with a letter outlining how I treated a matter in relation to rental income and can't remember exactly what I said but something like, 

'I've treated this cost in x manner and if this is incorrect please let me know'

It was worded that way rather than a direct question (as I did not want to open a can of worms) so that they didn't have to actually reply. Civil servants prefer it that way.

And revenue photocopied and stamped each page for me so I have proof that they received it.  The lady I dealt with was most kind, had a very sad story to tell me and wanted to work where I did at the time and she suggested the photocoping and stamping and she had no interest whatsoever in what I wrote.  Revenue don't want paperwork.  If I recall correctly it was Xmas eve morning and I was stressed about the matter, because I worry about getting my taxes done correctly.  

If they have an issue with my tax treatment later they cannot come back and tell me I didn't raise a doubt. Personally all I'm worried about is that if I did something wrong they cannot charge me penalties and interest, only tax which I have no problem with. 

No doubt my letter has gotton lost, was briefly read, if at all, and left on someone's desk for a year, or two and then filed in the archives, hopefully under my file. Or not. 

I cannot remember now what my issue was but at a guess it was probably wear and tear as that is the most tricky (I find) in relation to rental income.


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## mandelbrot (24 Oct 2011)

T McGibney said:


> Many tax professionals believe that ticking this box exponentially increases the risk of Revenue Audit, although some sources contest this.


 
While this may have been the case in the past, I think in these days of "aspect queries" and "profile interviews" expressions of doubt will not necessarily result in an audit, except to the extent that they contribute to a higher overall level of perceived risk in a case that was already heading towards being an audit anyway...

I suppose from Revenue's point of view it makes perfect sense to follow up on expressions of doubt to ensure everything is OK, but sinking their resources into audits solely in order to do that wouldn't be very efficient use of those resources.


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## T McGibney (24 Oct 2011)

Hi M,

Indeed, point noted. There may or may not be any rational basis for the professionals' wariness when it comes to audit selection and 'expressions of doubt' and its eminently possible that it is an urban myth. That said, the wariness persists...


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## oldnick (24 Oct 2011)

guideanna -I entirely agree that calling you dishonest was way out of line. I think it breaches the guidelines of this forum and certainly breaches normal rules of etiquette.
However, on a financial forum it is likely that there'd be a few accountants. Perhaps it may have been more diplomatic to say something like " i'm unsure of the value of an accountant in this instance" , rather than "waste of time..". 
But, even so, descriptions like dodgy  and dishonest were OTT.


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## Gekko (24 Oct 2011)

Guideanna (and oldnick),

Let's just clarify the position:



guideanna said:


> Hi all,
> 
> Sent my Form 12 tax return in a couple of weeks back and just got a letter back from them requesting additional info.
> One of these is computation of the capital allowances?
> ...


 
The OP submitted his/her 2010 income tax return without really knowing what he/she was actually submitting.



guideanna said:


> Thanks for the replies, yes it would have been a large amount since it was my first year and i had to have a new kitchen, new floors, tiles, and furniture put in to get it set up for renting.
> Will get working on that tonight so and get an excel sheet done up with the breakdown of the total.
> 
> Thanks


 
The OP provides further information regarding his/her 2010 capital allowances claim.



Gekko said:


> Some of that stuff sounds like it mightn't be eligible for capital allowances.


 


elcato said:


> I don't think a kitchen as total is covered, only the white goods so be aware of this.


 
A couple of posters point out that it's likely that the OP has incorrectly claimed capital allowances in relation to certain items.  In other words, the OP is now aware that there's an issue with his/her 2010 income tax return.



guideanna said:


> Well i put tiles and kitchen under capital allowances as i spent all of this before the place was rented to get it ready for rent. i was advised that capital allowances was whatever i spent to set up the place for rent?
> Am i now looking at having to move things from capital allowances to expenses? Bathroom fittings, kitchen appliances, flooring, tiles, furniture-not as replacement but as new to furnish the place....am i after messing it all up now?
> What will happen if i have?


 
The OP displays further ignorance of the relevant rules.



T McGibney said:


> This sounds like a case where paying for proper tax advice in the first instance would have saved the OP a lot of worry and hassle, and probably some money too.


 
A poster points out the benefit of using a tax advisor in cases such as this.



guideanna said:


> How would it have saved me money?
> 
> I'm pretty sure there was nothing i could have claimed for that i missed and i would have had to pay an accountant to do the forms for me which i was willing to take the time and worry of and do myself.
> Looks like i may have mixed up what i can claim as CA and what should have been expenses but from previous post sounds like it's easily fixed.


 


guideanna said:


> Yes but you said if i'd got someone to do it i would have saved a lot of money....just because i put some items that should have been under expenses as capital allowances doesn't mean the revenue is going to refuse to allow me claim these things, they will just allocate them under the correct heading.
> 
> I don't feel i needed to hire someone to file a tax return i am capable of doing myself and like that, revenue have been quick enough to clarify the amount and i'm sure will be equally quick enough to correct the error if required. No harm done if so.
> 
> Don't think it's been that much hassle or worry at all and think i'll have saved money by doing it myself.


 


guideanna said:


> Thanks for your input but i'm only interested in my original query.
> 
> I'll be doing the form 12 myself next year too, no way i'd be paying some accountant when i'm fully capable of doing it myself. Waste of money...."in my opinion"!!


 
The OP tells us all that accountants are a waste of money.



Bronte said:


> OP, just do up a list and see what revenue say. If they disagree with something they will come back to you. You may have incorrectly claimed something and you wouldn't be the first, but you didn't do so deliverately and revenue are not always the enemy so just supply what they want and see what they say. .


 
The OP didn't initially do it deliberately, but he/she is now aware that there's an issue and has done nothing to regularise the position.



guideanna said:


> Just to come back to all you so helpful posters. Rang revenue to check they received my letter with the breakdown of CA claim. My application is now being processed and they said no further information will be required at this time.
> IF they do require any further information i will obviously be more than happy to supply this....without any assistance from an accountant unless i see their service fit to attain.
> 
> Thanks so much for all the helpful posts.
> ...


 
The OP has not advised Revenue that there's an issue with his/her 2010 income tax return.  It's a self assessment system.  The onus is not on Revenue to identify errors in a taxpayer's return.



guideanna said:


> gekko in what way is my form 12 "dodgy"? I was asked to supply additional information, if revenue decide to audit me i have nothing to hide. if i made a mistake on the form listing expenses as capital allowances then i will put my hands up but i don't think this is the case and thus far revenue have not requested anything more from me.
> 
> Your telling me i've an obligation to correct my form but as far as i am aware i have everything in line so you telling me i'm dishonest is as well as ignorant and stubborn is way out of line.
> 
> ...


 


oldnick said:


> guideanna -I entirely agree that calling you dishonest was way out of line. I think it breaches the guidelines of this forum and certainly breaches normal rules of etiquette.
> However, on a financial forum it is likely that there'd be a few accountants. Perhaps it may have been more diplomatic to say something like " i'm unsure of the value of an accountant in this instance" , rather than "waste of time..".
> But, even so, descriptions like dodgy and dishonest were OTT.


 
You both appear to be missing the point that the onus is on the OP to point out to Revenue that there's an issue with his/her capital allowances claim.  Ours is a self assessment system.  The OP is morally and legally obliged to submit his/her return correctly.  If the OP now knows that the return is incorrect and does not amend the return, that is dishonest.  It is utterly dishonest.  And it's bizarre to be claiming that using an accountant is a waste of money while simultaneously making a complete dog's dinner of your own return.


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## Bronte (25 Oct 2011)

Gekko said:


> Ours is a self assessment system. The OP is morally and legally obliged to submit his/her return correctly. If the OP now knows that the return is incorrect and does not amend the return, that is dishonest. It is utterly dishonest. .


 
You can submit an incorrect return unknowingly.  Having the best accountant in the world or the most expensive does not guarantee that your return will be correct.  The OP has submitted her return to the best of her ability, and she has taken advice on herem revebye had a query and OP replied, where is the problem?  This is so far off deliberately trying to deceive revenue that I don't get your point.  

Incidentally revenue get things wrong all the time, and plenty of their own staff don't know their own rules.  There is also such a thing as human error, which revenue will deal with appropriately where it is not deliberate.


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## Gekko (25 Oct 2011)

Bronte said:


> You can submit an incorrect return unknowingly. Having the best accountant in the world or the most expensive does not guarantee that your return will be correct. The OP has submitted her return to the best of her ability, and she has taken advice on herem revebye had a query and OP replied, where is the problem? This is so far off deliberately trying to deceive revenue that I don't get your point.
> 
> Incidentally revenue get things wrong all the time, and plenty of their own staff don't know their own rules. There is also such a thing as human error, which revenue will deal with appropriately where it is not deliberate.


 
Sorry Bronte, but you interpretation of events is incorrect.

The OP now knows that his/her 2010 capital allowances claim reflects items that are unlikely to qualify for capital allowances.  The OP is therefore morally and legally obliged to amend the return.  It is not sufficient to sit back and wait for Revenue to detect the errors.  They may very well not detect the errors but that's not relevant.  Not revising the return is wrong.


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