Hallo. I have just had a meeting with a new client and actually feel quite uncomfortable on how bad it went. Although I referred to HMRC guidance and showed details on my PC screen, it was just an argument form the beginning. The client buys from boot sales 3 days a week, always cash and no receipts. Some are quite expensive items and I suggested that receipts should be asked for. He absolutely refused saying no one gets a receipt from a boot sale. The goods are then sold in his shop, ( junk shop really) with no till, just an exercise book where takings are recorded, and no receipt given to customers. I advised this was not adequate as there was no audit trail to ensure all takings recorded and suggested a till would be required but he said he did not feel one was needed. Three other traders put their own goods in the shop ( No commission) for sale in return for working unpaid in the shop one day a week each. Should these traders be employed within the PAYE system, they work 7 hours each week, and who is to know if they have other employment? The other issue is that he is paying these traders the sale proceeds in cash for their own goods though his shop, without any documentation. I suggested invoices were required for each payment he made to his trader friends. He got rather angry and called me a jobsworth, amongst other things. Needless to say I will not be dealing with this person.However, I would appreciate anyones view of my concerns, particularly the PAYE aspect Thank you Richard
Hi Richard
You dont actually need a till as long as proper records are maintained but it sounds like records arent maintained. You cannot run payroll without the exchange of money ( or so I understand), although there is most definately a tax issue here - comes under the bartering scenario. Sounds like there could be a potential tax evasion situation. What exactly is he expecting you to do - use a crystal ball? Is there a duty to report with this one??
The other people selling their goods in his shop is a common one in the second hand goods/antiques type trade but doesnt excuse them from keeping appropriate records!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Regarding PAYE I wondered if if it would be due as they "work" a set day with set hours each week with set responsibilities.
If this is not recognised, then PAYE and NIC in theory could be lost and the NMW could be avoided ( in principle).
I did wonder after I if thought this out a little too much, but the till suggestion was to introduce proper records as who is to say all cash payments are correctly recorded.
I spoke with the HMRC dedicated SA Helpline this morning and they were very helpful.
Regarding the boot sale purchases, I was advised that receipts are required as the goods are for resale.
Should HMRC look into a Return and there is no supporting evidence of payments for these goods then they will not be allowed.
Regarding the till, I stand corrected. A till is not mandatory but may well be beneficial to the shop owner.
If they choose to use paper records they should be adequate for purpose, i.e. sufficient detail.
I have also tried to get through to the PAYE helpline but extremely busy, and I was advised to call back later.
I will of course phone again, but would still appreciate anyone's views on this.
I have now managed to speak with the HMRC Agents PAYE helpline.
Again very helpful, and yes I was thinking to deep on this.
As Joanne correctly advised, as no money was changing hands there are no PAYE implications.
I would go back to your heading of 'nightmare client' and think about not taking it on. Sounds like they are very intrusive and would be dodgy every step of the way.
Even at a car boot sale you could take a self billing receipt book and get the seller to sign it to confirm cost.
I don't think there is a PAYE issue. They are working unpaid but not for any remuneration as such, if anything they could argue they are selling their own goods.
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Out of interest - its very common for other trades to sell through one traders shop - the trader who owns the premises normally takes a percentage off the sales price in the absence of the other traders. In this case it sounds like the other traders are helping the main one out by providing cover/working there in lieu of that commission - hence why I mentioned that bartering.
Interesting one, but one I wouldve walked away from had he been arguing with me from the minute we met.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
