It is fairly common for sole practitioners not able to keep proper books and records to fulfill his/her annual tax filing requirement. Occupations like insurance or estate agents, trade brokers, taxi or truck drivers, etc. often have little knowledge or attention to keep their expenditure records and evidence in an orderly manner.

Nevertheless, people in the above mentioned occupations always take an easy way to report their cash expenditure claims in their annual tax filing such as:

• traveling expenses
• entertaining expenses
• sub-contracting fees
• small consumable items

When tax officers asked the tax payers for evidence to support the expenditure claims, many could not submit information and explanations which could satisfy the officers. Consequently, tax payers could not be able to claim deductions of their “real” expenses or even being penalized for under-statement of net income. Our advice is – please keep a proper record of income and expenses to avoid any big trouble in future.