The HMRC advise that you should not delay sending in your tax return just because you do not have all the information you need. If you feel that there may be the possibility that you can recover the information then you should submit your return with provisional figures, and advise the HMRC when you expect to be able to file actual figures. You must ensure that figures you provided are reasonable and take account of any information that is available for the same period.
If you feel that the records are unlikely to be recovered you should submit estimates for the period which is missing. Once again these need to be reliable estimates, and you should be aware that HMRC obviously reserve the right to investigate and ensure the figures are reasonable and consistent with similar trades and previous years figures.
Make sure that if your estimates give rise to a tax liability, you pay your tax ideally by the 28th February, as this will ensure you do not receive a 5% surcharge on tax unpaid. If you then find your records and submit the actual figures at a later date which increases your tax liability, you will still receive the 5% surcharge on any amount unpaid at 28 February. On this basis you must ensure that any provisional or estimated figures are as reliable as possible.
Business clients should really ensure suitable back up procedures are in place to prevent problems such as this occurring. Duplicate bank statements can always be obtained as a last resort to substantiate reported figures.
By Jo Nockels
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.