I ran the VAT return for a client, and reconciled their bank. However they have since produced fuel receipts. I put the transactions through as fuel, but left the VAT off as they couldn't find the receipts (it was obvious on their bank statement that it was a fuel payment). Obviously now they have found the receipts they want to claim the VAT. Do I just do a journal from 73XX fuel to VAT liability for the £3.00 ish that is the VAT?
I ran the VAT return for a client, and reconciled their bank. However they have since produced fuel receipts. I put the transactions through as fuel, but left the VAT off as they couldn't find the receipts (it was obvious on their bank statement that it was a fuel payment). Obviously now they have found the receipts they want to claim the VAT. Do I just do a journal from 73XX fuel to VAT liability for the £3.00 ish that is the VAT?
Have to say Sammy that just because its on the Bank statements doesnt mean its a business expense. Ive had clients pay for their kids nursery before now. You should always have the receipt. As Im sure you are aware its not just about not claiming VAT without proof, but allocating something to expenses reduces profit and therefore other taxes, which could cause an issue in the event of an inspection by our friends from HMRC.
Although I get that even though you might get a receipt in this case that it still doesnt mean its business related as the thing is not addressed to the business.
Besides threatening to put such expenditure, without receipts, to DLA's or drawings often focuses business owners minds.
Your double entry is ok up to a point, but given you have mentioned 73xx which is only relevant to a couple of pieces of software, I would ask (as Im sure I usually do) which software you are using. Ok - let me put this another way - if you do just the journal, will the actual item be picked up on the next VAT return, or just sit where you have placed it?
Also, I do feel the need to ask - is there a fuel scale element or is the full VAT from the receipt fully reclaimable?
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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
Really sorry thought I had replied to this. They are company vans - no fuel scale element, and it was a payment that I knew for certain was diesel for a van because the boss had to go and get it due to a missing fuelcard. I needed to put the payment as a bank payment to complete the Bank Rec that is done weekly, but without the VAT receipt I couldn't enter the VAT element at the time. I probably should have explained my certainty about - I wouldn't have put it through if I wasn't sure.
My point still stands... Your double entry is ok up to a point, but given you have mentioned 73xx which is only relevant to a couple of pieces of software, I would ask (as Im sure I usually do) which software you are using. Ok - let me put this another way - if you do just the journal, will the actual item be picked up on the next VAT return, or just sit where you have placed it?
__________________
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
