So my director purchased some materials from a friend of his, they are all the sorts of materials that we use but he didn't/can't get an invoice for them? Is this OK to do? He says he can just write a docket to say he has purchased them...does this sound OK?
Think about what you are asking and imagine that you are having that same conversation with HMRC (not a bad habit to get into when pondering conundrums).
Your boss wants to write an invoice himself, to himself for an amount of money that they cannot prove was spent for the purpose of what they say that it was spent on.
I'm not for one moment suggesting that this is the case but would that not be the way that one would attempt to legitimise the purchase of stolen goods?... i.e. Money Laundering!!!!
For it to be a valid purchase there must be an invoice from the seller making it the responsibility of the seller to disclose the sale on their tax return.
No, I would not put that purchase through the books or introduce the materials into the business without proper documentation to support such.
kindest regards,
Shaun.
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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.
Think about what you are asking and imagine that you are having that same conversation with HMRC (not a bad habit to get into when pondering conundrums).
Your boss wants to write an invoice himself, to himself for an amount of money that they cannot prove was spent for the purpose of what they say that it was spent on.
I'm not for one moment suggesting that this is the case but would that not be the way that one would attempt to legitimise the purchase of stolen goods?... i.e. Money Laundering!!!! Or tax evasion on the part of the seller (oops, yes and on the part of the buyer as they think it reduces the profits!)
For it to be a valid purchase there must be an invoice from the seller making it the responsibility of the seller to disclose the sale on their tax return.
No, I would not put that purchase through the books or introduce the materials into the business without proper documentation to support such.
There is no problem with this as long as there is a proper record of the transaction and it is clear what has happened due to having and detailed and full record of what has happened. I would also add the full name and address of the person who "sold him the timber" anything else you can think of on the email which they becomes part of the records.
Its not money laundering as long as it is well documented and full details so HMRC should (or the Police) should they want to check it out can. If the timber was legally paid for and not claimed as a business expenses (why would it?) then its just a personal chattel and can be sold on without any implication to the person selling in.
We panic about ML (rightly to a point), but its all about making sure everything is documented properly and thinking things through to decide if it could be ML or not.
