Tax return - how to treat refunds

[minderjinx]

Help! I think I may have made a mistake (or several)in my tax return.

Can anyone please tell me whether you take the following off your income or count them as expenses:
a)amounts you refund to parents (such as when they pay in advance and then don't use your services) and
b)deposits which I return at the end of the contract

...I've taken them off income, which seems more logical, but as I was putting all my stuff away I found I'd put them down as expenses last time and I can't remember if that was what I was told to do.

I'd be grateful for advice.

...and if my figures are wrong, can I change them online?

I take them off income, but it won't make a difference to your tax calculation, the net amount will be the same.

Refunds should be taken off income.

Refundable deposits you receive should not go in to income, but do keep a record of them with your accounts. In accounting terms they are a liability of your business and are part of the balance sheet. Then when you refund them you can take them off the list - or if you hold back some of the deposit, that's when it should show as income.

If you have already submitted your tax return, you can't simply change it now although you can submit a new one (not sure if you can do this online though). Don't worry if you have done it wrong, it won't make a big difference to your tax calculation (and the difference will be in HMRC's favour so you won't get into trouble for underdeclaring income) and you'll probably find that many other people get this wrong too.

Thank you both for your replies. I'm off to work out how much I am out before deciding whether to try to put it right.

I've worked out that I took well over a thousand pounds worth of deposits, so I've overstated my income by that much. I guess that means it is worth putting in a revised return. Thanks again guys.

Don't forget to add back the 10% wear and tear deduction on the adjustment, otherwise you will have overclaimed that :)

Mr Anchovy is of course correct that your wear and tear calculation is based on your income, so ignore what I said about the net being the same. I just naturally took refunds off the income, because they reduced my income (that's the way my head sorted it).