HMRC Tax Calculator 2025/26

💡 What HMRC Collects

🏴󠁧󠁢󠁥󠁮󠁧󠁿 England, Wales & Northern Ireland

🏴󠁧󠁢󠁳󠁣󠁴󠁿 Scotland (Different Rates Apply)

💼 Class 1 NI (Employees & Directors)

🏢 Class 2 & 4 NI (Self-Employed)

💳 Class 3 NI (Voluntary Contributions)

Rate: £17.45 per week (£907.40 per year)

Purpose: Fill gaps in your National Insurance record to protect state pension entitlement

Who should pay: People living abroad, those with incomplete NI record, gap years, career breaks

📋 Common Tax Codes 2025/26

🔤 Tax Code Letter Suffixes

⚠️ Wrong tax code? Check your tax code on your payslip. If it's wrong, contact HMRC or use your Personal Tax Account online. You may be owed a refund or need to pay more tax.

⚠️ Who Must File Self Assessment

• Self-employed: Sole traders, partners in business
• High earners: Income over £100,000 per year
• Multiple income sources: More than one job, rental income, dividends, foreign income
• Capital gains: Sold assets over £6,000 (CGT threshold: £3,000 for 2025/26)
• Company directors: Unless paid via PAYE only
• Clergy: Ministers of religion
• Trustees, executors: Of estates or trusts

📅 Critical HMRC Self Assessment Deadlines

💰 HMRC Late Filing Penalties

💡 Plus 5% surcharge on unpaid tax at 30 days, 6 months, and 12 months overdue!

💍 1. Marriage Allowance - Transfer 10% Personal Allowance, Save Up To £252/Year

How it works: If you're married or in civil partnership, lower earner (under £12,570/year) can transfer 10% of personal allowance (£1,260) to higher-earning partner. Reduces their tax by up to £252/year (£1,260 × 20% basic rate). Claims backdated 4 tax years = £1,008 lump sum! Real UK example (2025/26): Sarah earns £8,000/year (part-time), husband John earns £35,000/year. Sarah doesn't use full £12,570 personal allowance (only needs £8,000). Without Marriage Allowance: Sarah pays £0 tax (under threshold). John pays £4,486 tax. With Marriage Allowance: Sarah transfers £1,260 to John. John's personal allowance increases from £12,570 to £13,830. John saves £1,260 × 20% = £252/year tax reduction! Total household income increased by £252. Claim backdated 4 years: Sarah claims for 2020/21, 2021/22, 2022/23, 2023/24 = £252 × 4 = £1,008 backdated payment from HMRC! Apply online via Personal Tax Account (5 minutes, instant approval).

🏦 2. Salary Sacrifice Pension Contributions - Save 32-47% On Every £1 Contributed

How it works: Instead of taking salary THEN paying into pension, you sacrifice salary BEFORE tax/NI calculated. Employer pays "saved" money into pension. You avoid income tax (20-45%) AND National Insurance (12% basic, 2% higher). Employer saves 13.8% employer NI (often adds to your pension!). Real UK example (2025/26): Emma earns £50,000/year, wants to contribute £5,000 to pension. Normal pension contribution (net pay): Emma receives £50,000 salary. Pays income tax £7,486 + NI £4,524 = £12,010 deductions. Take-home: £37,990. Contributes £5,000 from take-home to pension. HMRC adds 20% tax relief = £1,000 bonus. Total pension contribution: £6,000 (£5,000 + £1,000 relief). But Emma paid £5,000 from net salary to get £6,000 in pension. Salary sacrifice method: Emma sacrifices £5,000 salary (salary now £45,000). Income tax: £6,486 (£1,000 less). NI: £3,924 (£600 less). Take-home: £34,590. But £5,000 goes direct to pension! Total money in Emma's pocket: £34,590 take-home + £5,000 pension = £39,590 vs £37,990 + £5,000 = £42,990. Savings: £1,600/year! Plus employer saves £690 employer NI (13.8% × £5,000), often adds £345-£690 to Emma's pension = total benefit £1,945-£2,290/year!

🔢 3. Check Tax Code Annually - 6 Million UK Taxpayers On Wrong Code, Overpay £300-£1,200/Year

How it works: Your tax code tells employer how much tax to deduct. HMRC issues code based on previous year data, but life changes (new job, second income, benefits, pension) can make code wrong. Check payslip monthly, update via Personal Tax Account instantly. Real UK example (2025/26): David changes job mid-year. Old employer doesn't provide P45 (leaving certificate). New employer uses emergency tax code 1257L W1/M1 (Month 1 basis = no cumulative allowance). Emergency tax code problem: David earns £3,000/month (£36,000/year). Standard code 1257L spreads £12,570 allowance across 12 months = £1,047.50/month tax-free. Month 1 basis gives full £1,047.50 allowance EVERY month (doesn't accumulate unused allowance from early months). January salary: Should use £1,047.50 allowance. Emergency code uses £1,047.50. Taxed on £3,000 - £1,047.50 = £1,952.50 × 20% = £390 tax. Correct. But February onwards: Should have £2,095 cumulative allowance (£1,047.50 × 2). Emergency code still only uses £1,047.50. Overpays £1,047.50 × 20% = £209/month! By December: overpaid £209 × 11 months = £2,299! David checks payslip, sees W1/M1 code. Updates via Personal Tax Account. HMRC issues correct code 1257L (cumulative). Next payslip shows £2,299 refund! Total time: 10 minutes to check code + update online.

📝 4. Claim All Allowable Expenses (Self-Employed) - Reduce Tax Bill £2,000-£10,000+ Annually

How it works: Self-employed can deduct business expenses from profits before tax calculated. HMRC allows costs "wholly and exclusively" for business: home office, travel, equipment, professional fees, insurance, marketing. Many miss 50-70% of claimable expenses = overpay tax massively. Real UK example (2025/26): Lisa, freelance graphic designer, revenue £45,000/year. Without claiming expenses: Profit = £45,000 (assumes zero expenses claimed). Income tax: (£45,000 - £12,570) × 20% = £6,486. Class 2 NI: £179. Class 4 NI: (£45,000 - £12,570) × 9% = £2,919. Total tax: £9,584. Take-home: £35,416. With full expense claims: Home office (20% of £1,200/month rent = £2,880), broadband £360, mobile £240, laptop/software £1,800, professional subscriptions £400, insurance £500, marketing £1,500, travel £800, training courses £600, accountant £500. Total expenses: £9,580. Taxable profit: £45,000 - £9,580 = £35,420. Income tax: (£35,420 - £12,570) × 20% = £4,570. Class 2 NI: £179. Class 4 NI: (£35,420 - £12,570) × 9% = £2,057. Total tax: £6,806. Take-home: £35,420 - £6,806 = £28,614. Tax saved: £9,584 - £6,806 = £2,778! Plus Lisa keeps business equipment (laptop worth £1,200 after tax relief). Real saving: £2,778 + £1,200 value = £3,978 benefit!

💰 5. Use Personal Savings Allowance - £1,000 Interest Tax-Free (Basic Rate), £500 (Higher Rate)

How it works: HMRC gives tax-free allowance for savings interest: £1,000/year for basic rate taxpayers (20%), £500/year for higher rate (40%), £0 for additional rate (45%). Interest above allowance taxed via Self Assessment or PAYE code adjustment. With 5% savings rates (2025/26), can hold £20,000 (basic) or £10,000 (higher) tax-free. Real UK example (2025/26): Mark, basic rate taxpayer (£35,000 salary), has £25,000 in savings account earning 5% interest. Annual interest: £25,000 × 5% = £1,250. Tax calculation: Personal Savings Allowance: £1,000 (basic rate). Taxable interest: £1,250 - £1,000 = £250. Tax due: £250 × 20% = £50. Compare to higher rate taxpayer: Jane earns £60,000/year (higher rate). Same £25,000 savings, £1,250 interest. Personal Savings Allowance: £500 (higher rate). Taxable interest: £1,250 - £500 = £750. Tax due: £750 × 40% = £300. Strategy to maximize allowance: Basic rate: Keep up to £20,000 at 5% = £1,000 interest, fully tax-free! Higher rate: Keep up to £10,000 at 5% = £500 interest, fully tax-free! Additional rate (£125,140+ income): Use ISAs instead (£20,000/year ISA allowance, 0% tax on any interest/growth). Potential saving: £50-£300/year on savings, more if spread across ISAs.

📅 6. Register For Self Assessment Early - Avoid January Rush, Spread Tax Bill With Payments On Account

How it works: If you need to file Self Assessment (self-employed, high earner £100K+, rental income, etc.), register by 5 October for current tax year. File by 31 January following tax year end. Pay tax in 2 installments (payments on account): 1st payment 31 January (50% of last year's bill), 2nd payment 31 July (other 50%), then balancing payment next 31 January. Real UK example (2025/26): Sophie starts freelancing September 2024 (2025/26 tax year runs 6 April 2024 to 5 April 2025). Registers early - 1 October 2024: HMRC sends Unique Taxpayer Reference (UTR) within 10 working days. Activates online account by January 2026. Tax return deadline: 31 January 2026 (16 months away!). Sophie files return December 2025 (1 month early). Tax due: £5,000. Payment schedule: 31 January 2026: Pay £5,000 (first year = no payments on account due). 31 January 2027: Pay 1st payment on account £2,500 (50% of £5,000 from previous year). 31 July 2027: Pay 2nd payment on account £2,500. 31 January 2028: Pay balancing payment (if 2026/27 tax bill higher/lower than £5,000). Spreading benefit: Instead of paying £5,000 lump sum in year 2, Sophie pays £2,500 every 6 months = easier cashflow! Registers late - misses deadline: Tom starts freelancing September 2024 but doesn't register until January 2026 (missed 5 October deadline). Penalty: £100 fine for late registration! Plus Tom now has only 1 month to file return (deadline 31 January 2026). Rushes return, makes errors, HMRC enquiry = £2,000 accountant fees to fix. Cost of being late: £100 + £2,000 = £2,100!

📦 7. Keep Records 5+ Years - HMRC Can Investigate 4-6 Years Back, Proof Saves £5,000-£50,000+

How it works: HMRC can open enquiries 12 months after you file return. Can investigate 4 years back normally, 6 years if careless, 20 years if deliberate tax evasion. You MUST keep records to prove income, expenses, tax calculations. No records = HMRC estimates (always in their favor) + penalties. Legal requirement: keep records 5 years after 31 January filing deadline (e.g., 2025/26 tax year → file by 31/1/26 → keep records until 31/1/31). Real UK example (2025/26): Ahmed, self-employed plumber, earns £55,000/year, claims £12,000 expenses (2020/21 tax year, filed January 2022). April 2023: HMRC opens enquiry (within 12-month window after 31/1/22 filing). Requests proof of all £12,000 expenses claimed. Ahmed kept excellent records: Digital copies of all invoices, receipts, bank statements, mileage logs, home office calculations, supplier invoices. Submits everything to HMRC. HMRC review confirms £12,000 expenses legitimate. Enquiry closed, no adjustments needed. Time spent: 3 hours organizing records. Compare to similar case - no records: Yasmin, also self-employed, claimed £12,000 expenses but threw away receipts after filing return. HMRC enquiry April 2023. Cannot prove expenses. HMRC disallows all £12,000 expenses (treats as personal spending). Recalculates tax owed: Extra taxable income: £12,000. Extra income tax: £12,000 × 20% = £2,400. Extra Class 4 NI: £12,000 × 9% = £1,080. Total underpaid tax: £3,480. HMRC penalties: Careless error penalty: 30% of tax owed = £3,480 × 30% = £1,044. Interest on late payment (2 years at 7.75%): £3,480 × 7.75% × 2 = £539. Total bill: £3,480 + £1,044 + £539 = £5,063! Plus £1,500 accountant fees to handle enquiry. Total cost of no records: £6,563 + stress! Ahmed's 3 hours organizing = saved £6,563. Hourly rate: £2,188/hour!

❌ 1. Not Claiming Marriage Allowance - 2.4 Million Eligible Couples Missing Out (£600m Unclaimed Annually)

The mistake: Married couples or civil partners where one person earns under £12,570/year (doesn't use full personal allowance) failing to transfer 10% (£1,260) to higher-earning partner. Saves up to £252/year but 2.4 million eligible couples never claim! Real UK example (2025/26): Helen part-time (£9,000/year), husband Paul full-time (£32,000/year). Married 8 years, never claimed Marriage Allowance. Annual loss: Missing £252/year tax saving. Total loss over 8 years: £252 × 8 = £2,016! Paul pays extra £252 tax every year unnecessarily. Why they didn't claim: Didn't know it existed (HMRC doesn't proactively tell you!). Thought it applied automatically (it doesn't - must apply). Assumed complex process (actually 5-minute online form). HMRC allows backdating 4 tax years: Helen claims in January 2025 for 2021/22, 2022/23, 2023/24, 2025/26. Receives £252 × 4 = £1,008 backdated lump sum! But still lost 2016-2020 claims (£252 × 4 = £1,008 forever gone). Total permanent loss: £1,008 from first 4 years they could have claimed. Plus opportunity cost (if invested £252/year at 5% = £2,200+ after 8 years). How to claim: GOV.UK Marriage Allowance application (5 minutes). Applies automatically every year until circumstances change. Backdated 4 years included in first claim.

❌ 2. Wrong Tax Code All Year - Overpay £300-£1,200, Takes 3-6 Months For HMRC Refund

The mistake: Not checking tax code on payslip monthly. Emergency tax codes (W1/M1), old codes from previous job, incorrect benefits/deductions mean you overpay tax every month. Many workers don't notice until end of tax year when HMRC sends P800 calculation showing overpaid. Real UK example (2025/26): Rachel starts new job March 2025. No P45 from old employer (lost in post). New employer uses emergency code 1257L M1 (month 1 basis). Problem with M1 code: Only uses current month's allowance, doesn't accumulate unused allowance from earlier tax year. Rachel earns £2,500/month (£30,000/year). Standard 1257L cumulative code: Tax-free in March = £12,570 ÷ 12 × 12 months = £12,570 (full year's allowance available). Should pay tax on: £2,500 - £12,570 remaining allowance = £0 taxable. Tax: £0 (uses up remaining allowance from April-February). Emergency M1 code: Tax-free in March = £12,570 ÷ 12 = £1,047.50 (only 1 month allowance). Pays tax on: £2,500 - £1,047.50 = £1,452.50 × 20% = £290.50 tax. Overpaid: £290.50 in March alone! Rachel doesn't check payslip. Emergency code continues April, May, June... (new tax year). April-December 2025: Overpays £290.50/month × 9 months = £2,614.50! P800 arrives October 2026 (18 months after March 2025!). Shows £2,614.50 overpaid. HMRC refunds by cheque/bank transfer 3-6 weeks later. Total time Rachel's money locked with HMRC: 19-20 months! Opportunity cost: If Rachel invested £290/month at 5% over 19 months = lost £250 potential growth. How to prevent: Check payslip every month. Look for W1/M1/X suffix (emergency codes). Update tax code via Personal Tax Account (instant fix, corrected next payslip).

❌ 3. Late Self Assessment Filing - £100 Penalty Day 1, Then £10/Day After 3 Months (Max £900), Plus Interest

The mistake: Missing 31 January Self Assessment deadline. Even 1 day late = automatic £100 fine. Then daily penalties, 6-month penalties, 12-month penalties escalate rapidly. Many self-employed underestimate HMRC's automation - penalties apply even if you owe £0 tax! Real UK example (2025/26): James, freelance web developer, must file 2023/24 tax return by 31 January 2025. Tax owed: £0 (paid via payments on account). James files 15 February 2025 (15 days late): Immediate penalty: £100 (automatic, no exceptions even if owe £0 tax). James ignores it, files 15 May 2025 (3 months 15 days late): Original £100 penalty. PLUS £10/day for days 91-105 after deadline = £10 × 15 = £150 daily penalties. Total penalties so far: £250. James still ignores, files 15 August 2025 (6 months 15 days late): Original £100. Daily penalties £900 (max = 90 days × £10). 6-month penalty: £300 OR 5% of tax owed (whichever higher). James owes £0 tax but HMRC estimates £8,000 tax due. 5% of £8,000 = £400. 6-month penalty: £400. Total penalties: £100 + £900 + £400 = £1,400! Finally files 15 February 2026 (12 months 15 days late): Previous penalties: £1,400. 12-month penalty: another £300 OR 5% tax (whichever higher) = £400. Total penalties: £1,800! Plus interest on unpaid penalties at 7.75%: £1,800 × 7.75% × 0.5 years = £70. Final bill: £1,870 in penalties despite owing £0 tax! Compare to filing on time: 0 minutes extra effort (had to file anyway). £0 penalties. Lesson: File by 31 January even if owe no tax. Set reminder 1 December (2 months early).

❌ 4. Not Claiming Expenses (Self-Employed) - Lose £2,000-£10,000+ Deductions Permanently

The mistake: Self-employed workers not claiming legitimate business expenses on Self Assessment. Once tax year filed, can't go back and add expenses (unless amend within 12 months). Conservative claiming = overpay tax permanently. Many miss 50-70% of allowable expenses: home office, mileage, equipment, professional fees, marketing, training. Real UK example (2025/26): Karen, freelance photographer, revenue £38,000/year. Files Self Assessment with minimal expenses: Camera equipment £2,000 (only claimed new camera). Total expenses claimed: £2,000. Profit: £38,000 - £2,000 = £36,000. Income tax: (£36,000 - £12,570) × 20% = £4,686. Class 2 NI: £179. Class 4 NI: (£36,000 - £12,570) × 9% = £2,109. Total tax: £6,974. What Karen could have claimed: Camera equipment: £2,000 (claimed). Laptop & software: £1,500. Home office (15% of £900/month rent = £1,620/year). Broadband & phone: £600. Car expenses (3,000 business miles × 45p = £1,350). Marketing (website, ads): £800. Professional insurance: £400. Training courses (photography workshops): £500. Accountant: £350. Stationery, printing: £200. Total legitimate expenses: £9,320. If Karen claimed all expenses: Profit: £38,000 - £9,320 = £28,680. Income tax: (£28,680 - £12,570) × 20% = £3,222. Class 2 NI: £179. Class 4 NI: (£28,680 - £12,570) × 9% = £1,450. Total tax: £4,851. Tax saving: £6,974 - £4,851 = £2,123/year! Karen's actual loss: Overpaid £2,123 in 2025/26 tax year. Cannot amend after 12 months (deadline 31 Jan 2027 to amend 2025/26 return). Loses £2,123 permanently for that year. If Karen does this 5 years = £2,123 × 5 = £10,615 total overpaid! How to prevent: Track ALL business expenses monthly (app like QuickBooks, Xero, FreeAgent). Claim home office (simplified rate £6/week = £312/year if working 25+ hours/week at home). Claim 45p/mile first 10,000 business miles (many forget mileage!). Keep receipts/invoices 5 years.

❌ 5. Ignoring P800 Tax Calculations - HMRC Errors Common, Could Owe OR Be Owed £500-£3,000

The mistake: HMRC sends P800 "tax calculation" letters if they think you overpaid or underpaid PAYE tax. Many people ignore these (think it's junk mail), miss refunds OR get debt collection letters 6 months later. HMRC systems make errors - always check P800 against your own records. Real UK example (2025/26): Michael receives P800 October 2025 for 2025/26 tax year saying he owes £1,850. HMRC's calculation: Says Michael had 2 employments simultaneously: Job A £35,000, Job B £18,000. Total income £53,000. Personal allowance used only on Job A (£12,570). Job B taxed at BR code (20% on all £18,000 = £3,600 tax deducted). HMRC says: Correct tax on £53,000 = £8,086. Actually paid: £4,486 (Job A) + £3,600 (Job B) = £8,086. Wait, that's correct? But HMRC claims Job B only deducted £1,800 (error in their records). Says Michael underpaid £1,800. Demands payment by 31 January 2026. Michael ignores P800 (thinks it's wrong, doesn't respond). January 2026: HMRC adjusts 2025/26 tax code to collect £1,800 underpayment. Michael's monthly take-home drops £150/month (£1,800 ÷ 12). Causes financial hardship. March 2026: Michael finally checks P800 properly. Compares to P60s from both employers. P60 from Job B shows £3,600 tax paid (not £1,800!). HMRC made data entry error. Michael calls HMRC, submits P60 as proof. HMRC admits error, corrects records, refunds £1,800 collected via tax code. Total time wasted: 4 months of wrong tax code, 3 hours on phone to HMRC, stress. Compare to checking immediately: Michael checks P800 in October 2025. Spots error, calls HMRC within 1 week. Submits P60 copy. HMRC corrects before January 2026. No impact on take-home pay. Lesson: Always check P800 against P60s/payslips. Respond within 60 days to dispute. Keep P60s 6+ years.

❌ 6. Mixing Personal & Business Finances - Trigger HMRC Enquiry, £3,000+ Accountant Fees To Fix

The mistake: Self-employed using same bank account for business income/expenses AND personal spending. Makes it impossible to track business expenses accurately, triggers HMRC suspicion ("why are you claiming Tesco groceries as business expense?"), requires expensive accountant to untangle if HMRC opens enquiry. Real UK example (2025/26): Oliver, freelance electrician, uses personal bank account for everything. Revenue £50,000/year goes into same account as salary from side job (£8,000), savings interest (£400), rental income (£6,000). Personal bills, groceries, holidays all paid from same account. Self Assessment time (January 2026): Oliver can't separate business expenses from personal. Guesses £15,000 business expenses (rough estimate of van, tools, materials, insurance, fuel). Files return: Revenue £50,000, expenses £15,000, profit £35,000. April 2026: HMRC opens enquiry. Asks for proof of all £15,000 expenses. Oliver submits bank statements (only evidence). HMRC's analysis: Sees £50,000 income PLUS £8,000 employment, £400 interest, £6,000 rent = £64,400 total incoming. Sees outgoings: £25,000 to mortgage, £8,000 groceries (Tesco, Sainsbury's), £3,000 holidays (TUI, Ryanair), £2,000 restaurants, £1,500 gym/subscriptions, £15,000 van/tools/materials (legitimate business), £5,000 fuel (mix of business/personal, no mileage log). HMRC questions: How much of £5,000 fuel is business vs personal (60% personal use assumed)? Disallows £3,000 fuel. How much employment income (£8,000) was declared? Not on tax return! Missed income. How much rental income (£6,000) was declared? Not on tax return! Missed income. HMRC recalculation: Business revenue: £50,000. Business expenses: £15,000 - £3,000 fuel disallowed = £12,000. Business profit: £38,000. PLUS employment income £8,000. PLUS rental profit £6,000 (assume no expenses). Total income: £52,000 (£38K + £8K + £6K). Original return showed £35,000 profit only. Undeclared income: £17,000! Extra tax due: £17,000 × 20% income tax = £3,400. £17,000 × 9% Class 4 NI (where applicable) = £1,530. Total underpaid: £4,930. Penalty for careless error: 30% × £4,930 = £1,479. Interest 2 years at 7.75%: £765. Total bill: £7,174! Plus accountant fees to handle enquiry: £3,000. Total cost: £10,174! How to prevent: Open separate business bank account (free business accounts available - Starling, Tide, Monzo). ALL business income into business account. ALL business expenses from business account. Personal expenses from personal account only. Instant separation = no confusion, no HMRC enquiries.

❌ 7. Not Keeping Records - Lose Appeals, Pay Disputed Tax + Penalties (£5,000-£20,000+ Bills)

The mistake: Not keeping receipts, invoices, bank statements, contracts for 5+ years after filing tax return. HMRC can investigate 4-6 years back, requests proof of income/expenses. No records = HMRC disallows expenses, estimates higher income, you lose appeal, pay huge backdated bills + penalties + interest. Real UK example (2025/26): Nina, freelance makeup artist, files Self Assessment for 2020/21 tax year (filed January 2022). Revenue £42,000, expenses £14,000 (makeup, travel, training, insurance, marketing). Profit £28,000. Throws away receipts after filing (thinks "tax return done, don't need these anymore"). March 2023: HMRC opens enquiry (within 12-month window). Asks for proof of £14,000 expenses. Nina has: Bank statements (shows money spent but not what it was for). No receipts. No invoices. No mileage log. No home office calculation. Can only prove £3,000 expenses (insurance £800 has online portal showing payment, accountant £500 sent email invoice, training course £1,700 has certificate with fee receipt). HMRC disallows £11,000 expenses (£14,000 claimed - £3,000 proven). Recalculated profit: £42,000 - £3,000 = £39,000 (vs original £28,000). Extra taxable profit: £11,000. Extra tax due: Income tax: £11,000 × 20% = £2,200. Class 4 NI: £11,000 × 9% = £990. Total underpaid: £3,190. Penalties: Careless error penalty: 30% × £3,190 = £957. Interest 2 years at 7.75%: £495. Total bill: £4,642! Nina appeals to tribunal: Tribunal says "no records = cannot prove expenses were business-related, HMRC decision upheld". Nina pays £1,500 for tax tribunal representation (loses case). Total cost: £4,642 + £1,500 = £6,142! Compare to identical case WITH records: Priya, also makeup artist, same £14,000 expenses claimed, same HMRC enquiry. Priya kept: Digital copies of all receipts (phone photos uploaded to Dropbox). Spreadsheet of mileage (client visits). Home office calculation (10% of £800/month rent = £960/year). All supplier invoices (makeup brands). Submits everything to HMRC. HMRC reviews, confirms £14,000 legitimate. Enquiry closed, no adjustments. Cost to Priya: 4 hours organizing records over 2 years = £0 + time. Lesson: Keep ALL records 5+ years. Photos of receipts on phone. Digital filing (Dropbox/Google Drive). Takes 10 min/month. Saves £5,000-£20,000 if enquiry happens.