I have some business expenses to input into Sage for the first time.
Basically one of the directors of the business has got some travel expenses with no receipts.
My first question is how do I account for an expense with no receipt? Would the taxman be unhappy that there is nothing to show that that money was a business expense?
What evidence is there that the business expenses exist?
Credit card entries are not necessarily sufficient appropriate evidence as what about cases where people buy petrol and other things at a service station but the statement doesn't break that down. Also of course credit card statements don't have VAT numbers on them.
Sounds as though this might be an expensive lesson for the director as if the expenses cannot be allocated anywhere else then they are likely to end up in the DLA.
General rule is that if there's not sufficient appropriate evidence of the expense then as far as the business is concerned they never happened.
Sorry it's not a more positive reply,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Following on from this, how does one account for petrol expenses. Basically one director has used his personal car (rented for the day as another expense) and has produced a few petrol receipts. Do I behave as normal when inputting into Sage or is there some government guideline for this? It is not a company car in any way...
Can you clarify what you mean by "Personal car rented for the day from another account" please.
If we are talking about a car rented by the busines then it's not a personal car.
If we are talking about a car rented personally then any money for rental of the car is a straight withdrawal of funds from the company by the director so increasing their DLA.
Seems like another case of confusing the companies money and their own.
Once we have a bit more info on the scenario I'll try and pad out the answer a bit.
talk later,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Basically we had a team building session in London. As the employee(not director my mistake) livews in Wales, he rented a car to get to London and back. He of course used petrol as well.
If he paid for the hire car himself then it becomes his private vehicle and he should then make a mileage claim at £0.40 per mile for the use of that car (assuming the company agrees to this) and then the business can reclaim the VAT element only from the petrol used for this journey, provided he has receipts for that petrol.
But he must have paid the hire car and petrol costs himself and clearly cannot claim these or any portion of them back from the company (just provide them with the petrol reciepts so they can claim the VAT)
I would say it would depend on whether or not the car was hired on behalf of the company. If it was rented on behalf of the company and the invoice from the hire firm is in the name of the company then it would be posted to car hire (if in sage somewhere in the 7300 range) and the petrol receipts for it too.
If however, it was hired by the person then I would put it in as travel expenses or training expenses paid to the employee without claiming any VAT.
It's a shame that there isn't a better way to ensure business costs are not lost, but I guess we all have to keep the taxman and our bookkeeper happy. Wouldn't the rental company be able to issue a receipt based on the date of rental?
