I do the book keeping for a small taxi firm and the owner is not getting receipts for things like car washes and vacuuming. Instead I get a handwritten note or petty cash voucher. I have queried it with the owner and he says its difficult/impossible to get them.
I am perfectly satisfied that the expenses are being incurred, but will Inland Revenue see it the same way? The notes are dated and signed by the drivers and amount to no more than £20 a week.
You shouldn't have a problem. Many years ago I was asked to assist someone who the HMRC were giving a lot of grief to. I eventually found out that the problem was that he "faked" the receipts. The HMRC would have accepted them if he had admitted that he had created them himself - it was the fact that he created them and then stated they were provided by the people he paid was the problem. The sums involved were large, but it was not the amounts they didn't like, but the fact he denied creating them.
There was a court case when a Tax Inspector stated that everyone could get a receipt if they asked for it. The Judge asked the Tax Inspector when was the last time he received a receipt from his Window Cleaner. The Tax Inspector admitted - never!
Ever tried to get a receipt from Apple for a Iphone app?????
-- Edited by YLB-HO on Tuesday 14th of June 2011 12:40:31 AM
Apple was chastised by HMRC for not issuing Vat receipts from it's app / itunes stores a while back. I've not used the App store but with Itunes the receipt is stored in Account history.
hth
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Just an idea - my local car washes and vacuum people issue a slip of paper with the code to enter to make the car wash / vacuum. They don't have a price but at least if you attached them to the petty cash slip it would demonstrate that the car was washed / vacuumed.
Just an idea - my local car washes and vacuum people issue a slip of paper with the code to enter to make the car wash / vacuum. They don't have a price but at least if you attached them to the petty cash slip it would demonstrate that the car was washed / vacuumed.
Thanks Liz, I do this when there is one attached.
Thanks also to Fraulke, I didn't think it was a major issue but just wanted to clarify.
I must admit every so often I go to the IAB website and access CCH Online (which is free to IAB members) and type in words like; "Subsistence"..... and just read through some of the cases... I think its more interesting and of course as long as I remember to record what I am doing counts towards CPD.
I can't remember the case/statute but what was that about 'contemporaneous records' being as valuable as a receipt? In other words, if you can cajole your client to keep their bookkeeping weekly, and prove they did so, then that should be almost as good as proof. Obviously, the larger the amount, the less likely that proof of purchase wouldn't be available.
