Personal Expenditure and the Taxman

Tax Enquiry

The taxman has asked to see your personal credit card statements as part of an enquiry on the company. His excuse for needing them maybe so he can get an idea of your ‘lifestyle’. In other words he just wants to make sure you income is enough to cover your expenditure. An enquiry into the company’s tax return doesn’t include your own and so he has no right to look at these unless it has a direct connection with the company or its tax return. If he has the suspicion that your spent income is not been taxed then he should launch an investigation into your personal tax return.

Statements

If the credit cards have absolutely nothing to do with income reported on the tax return then there is no tax-obligation to keep them and you may if you wish destroy them, after all if the tax man did get his hands on them they might make an interest read. It is advisable to have a different credit card just for business expenses; this will prevent the taxman seeing all your personal expenditures.