I am looking for some advice on clients that are sub contractors in CIS.
So my topic is aimed at bookkeepers / accountants that have expertise in that area.
What do you class as there expenses---Travel, Working Clothes, Tools
In many cases they do not keep records for you to work from.
Travel can be done at 40p @ mile if you know there travelling mileage !
From receipts if you have them.
How would you deal with it if they didn't keep a record of the mileage?
Sometimes there contractor charges them for tools and materials, can this be claimed back without any receipts that is just transfering the amount from his pay slip.
Tell them - no records - no claims! That normally gets them to start!
Or course if they keep a pocket diary, they could record the information in the dairy. But then the dairy becomes part of the accounts and cannot be withheld from HMRC.
At the end of the day if someone records a job in the diary and get paid for it, they had to get there. But beyond that if you can't prove it even as a note in a diary then they can't claim it. They also should out a note about where they got the money to pay for it too. If paid by cash - where did the cash come from? If there is no record which can be used as part of the accounts (i.e. personal bank statement) then they can't claim the got the cash or the expense.
In the end most clients agree to have a business bank account and get a debit card which they use to pay for these expenses. Debit card receipt is better than no reciept - and you can always google the name on the receipt to check if it was a ligitimate business expense or not.
