Can you please advise me on how to account for cash that has been stolen?
We got broken into and they took the petty cash - approx £1k
I need to remove the cash from the Banks and put it to the I&E - but as what kind of expense?
Sundry items? Miscellaneous? A new category? Believe it or not, the accountants didn't bother doing it when they did our year end, despite numerous requests from me to do so!!!
Many thanks in advance for all your help
Em
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Em
MAAT, CIMA student, avoider of Tax as much as possible and going greyer by the day.
Was the cash (and any other property stolen) insured? If so how much of the loss has / will be reimbursed?
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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.
This happened in Dec 14, I started in Feb 15. Year End was Apr 15.
The books were in such a mess, I was still working on them right up until January this year, literally a week before they had to be submitted.
Nothing else was stolen, just a lot of damage to the building.
We have claimed on the insurance for the building repairs, its just the Petty Cash account has not been amended.
All being well, the accounts should be completed and signed off no later than July this year, but I want them as near perfect as possible, as the accountants don't seem to do the simple things very well.
They still put through accruals that they carried forward year after year, and prepayments too, even though I now do them monthly and asked for them to clear them out with their year end adjustments.
Went a bit off tangent there, I apologise
Em
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Em
MAAT, CIMA student, avoider of Tax as much as possible and going greyer by the day.
Just to confirm. Only the building repairs were claimed for, not the stolen cash.
For the petty cash its a write off (or it could be, see later in answer).
For money to be written off there has to be a police reference number in order for the treatment to be accepted by HMRC.
Provided that you have that then create an expense account for theft and write off through P&L.
£1k seems a little much for a normal petty cash account. Is this normal or have management perhaps bolstered the amount? Certainly HMRC are likely to consider that amount of cash on the high side if the general amount kept on site is much lower.
One slight complication to this scenareo is that it is managements position to both safeguard company assets including cash and to reduce risk to an acceptable level... Why was the petty cash not insured? HMRC may take to approach that the loss was the managers so why should such loss be compensated through the tax system by reducing profits / extending losses.
You really need more detail on what was insured, why the petty cash was not insured, what evidence there was for the balance of the petty cashg at the time of theft and whether a police incident report details the theft of the petty cash.
It might actually be advisable to speak with the company accvountant to see what they say about the treatment of the theft.
I know that I'm leaving you here with more questions than you started with but on the bright side, whilst they may not be the answers they are the right questions for a scenario that is unfortunately possibly more complex than it initially seems.
Your simplest case that you can hope for here is a straight write off through a P&L expense (you should have a write off expense in your COA).
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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.
