Been reading both on the HMRC site and also this forum in regards to Client Entertainment and the VAT handling of it.
Think i've come to the conculsion that my client can't claim any VAT back when his entertaining any potential or current clients.
My question is, when posting this into sage, should this client entertainment be entered as a T2 or T9?
Also how do I know for sure that these receipts have acutually been used to entertain clients and the receipt isn't for a nice meal his had with the wife or the footy tickets the business purchased he isn't taking his son for a birthday treat??
Or is it just the case if my client says it's entertaining clients, I post it there?
Been reading both on the HMRC site and also this forum in regards to Client Entertainment and the VAT handling of it.
Think i've come to the conculsion that my client can't claim any VAT back when his entertaining any potential or current clients.
My question is, when posting this into sage, should this client entertainment be entered as a T2 or T9?
Also how do I know for sure that these receipts have acutually been used to entertain clients and the receipt isn't for a nice meal his had with the wife or the footy tickets the business purchased he isn't taking his son for a birthday treat??
Or is it just the case if my client says it's entertaining clients, I post it there?
Many Thanks
Sage - T0 with zero for the VAT amount.
How do you know - sometimes you won't and you'll have to ask the client. Some times, there might be giveaways on the receipt itself.
If there are receipts that you aren't sure of, make a note or put them to one side and ask the client about them, all in one go.
Sometimes, the client won't know whether it's entertaining or not, and you might have to be prepared to explain what "entertaining" actually is
Just run into another small problem with the same client, the client buys from Tesco/Sainsburys items such as tea,milk, bread,cakes, softdrinks all for the office kitchen, some of these I have the receipts for, others I just get a petty cash receipt saying "£20 - Kitchen Bits"
Firstly what nominal should I post this to in sage? and should these types of transactions also be entered as T0
Regarding the second part of your question, I always think if you start to find any of the following on the vouchers, it throws the other expenses into doubt:
kids sausages with client Sunday afternoon meals Clicquot, tea bags £85 Aberdeen and London hotel on same day
Always look at the time of day and as Louise says if there are enough dead giveaways then the footy match is probably private too. Tim
lol Tim... Some great one's there. (Think we've all seen equivalents of the tea bags for £85 scenario).
Actually, on a similar note to that last one I've legitimately had hotels in London and Edinburgh on the same day... Although that's waking up in one place and goingh to bed in the other, not both at the same time.
Also, on more than one occassion I've also had to travel to another clients in the middle of the night where I've already paid for a hotel so there are cases where there is a couple of hundred miles of mileage AND a hotel for the same night.... Oh the fun of living your work and clients who work 24/7!
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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.
Just out of curiosity, lets say I do think foul play is happening, what course of action should I follow?
Ask the client for Confirmation, I guess is my first step but if he insists it's client entertainment but i can see it's on a Sunday afternoon with two kids meals on the receipt, what should I do?, or if you don't mind me asking how would deal with it.
I once had some put in 2 diners on the same day (while working overseas), when I googled the items to see what he'd eaten, it came back with Toothpaste, deoderant and other things you buy from a chemist!
Of course there was the £400.00 diner bill, when the MD took his daughter and all her friends out for a meal for her birthday Except it had the words "copy" on it, as I understand his ex-wife actually paid the bill and kept the original receipt!
Just out of curiosity, lets say I do think foul play is happening, what course of action should I follow?
Ask the client for Confirmation, I guess is my first step but if he insists it's client entertainment but i can see it's on a Sunday afternoon with two kids meals on the receipt, what should I do?, or if you don't mind me asking how would deal with it.
Should I just post to Directors Loan Account?
Thanks PW
Often, it really isn't deliberate - especially for "shoebox/carrier bag" jobs... the client has may be just emptied out their entire wallet/purse/handbag/glove compartment and not actually looked at what receipts they're handing over.
Sometimes, the client will say that the business card was the only one they had at the time/or it was accidental, in which case, just pop those personal items to the DLA.
If it's clearly entertainment but the client is insisting it isn't, that's when your powers of persuasion/client education come into play ;-/
Lol those were actual examples from one new client in a 12 month period, although the London thing could have been a West End show or Harrods. Archetypal owner/director, much in need of the child / parent duty of care lecture. I've rarely had to say goodbye to a client and all i'd say is not to be too confrontational: "Yeh ok" to a new hat and dress the weekend before Ladies Day. Then just pop it into the DLA :o)
