My client runs an mot garage and has purchased parts for his vehicle through the company. He has then generated a sales invoice to his company which is vatable, then paid the invoice via the company bank account. I have never come across a director issuing a sales invoice to the company. Bank payment from company bank account to pay purchase invoice yes but not sales invoice.
Am i missing something here with regards to the sales invoice.
My client runs an mot garage and has purchased parts for his vehicle through the company. He has then generated a sales invoice to his company which is vatable, then paid the invoice via the company bank account. I have never come across a director issuing a sales invoice to the company. Bank payment from company bank account to pay purchase invoice yes but not sales invoice.
Am i missing something here with regards to the sales invoice.
The guy is clearly a moron! An invoice from the limited company to the same limited company. He seriously thinks the company has sold the company the parts? Hilarious.
So the parts must still be on company premises and not in his car!
Is the sales invoice in the same amount as the goods purchase invoice? If so, on the sales invoice - cross out the company name (in red pen), add his and 'pay' it from his DLA, whilst slapping round the face with the amended invoice.
I would say make sure he hasnt popped the cash in the petty cash tin, but some how I doubt it!
edited for clarity
-- Edited by Cheshire on Sunday 24th of September 2017 09:23:49 AM
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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
Director is a sole trader. Sales invoice is higher than purchase invoice and parts are now on his own car. No petty cash involved as he has used the company debit card to pay for the goods via the card machine. He has actually issued two invoices to the company and paid both with the company debit card. I asked him why he had generated the invoices and he told me that he had been advised to do it this way
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.
Can you confirm status of the business Nikole? Limited (=company) or sole trader.
Also, what did the muppet say when you told him that when he 'paid' the sales invoice using his business debit card, that the money went out of the business bank to then go back into the business?
He has charged his own business a profit margin! Oh boy this has given me such a giggle!
He hasn't been told to do this, he has misunderstood what he has been told! He isn't the sharpest tool is he.
Pop it to his DLA or drawings, depending on the type of entity! Never mind slapping him with the invoice, you need to use a whole exhaust!
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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
I didnt offer any response to reason as I was a little gob smacked as to why they'd issued themselves invoices with profit and vat then paid with the company debit card. Surely it would be easier for them to refund the transaction and void/credit the invoice and put the purchase invoice through DLA.
-- Edited by Nikole on Sunday 24th of September 2017 09:58:27 PM
I didnt offer any response to reason as I was a little gob smacked as to why they'd issued themselves invoices with profit and vat then paid with the company debit card. Surely it would be easier for them to refund the transaction and void/credit the invoice and put the purchase invoice through DLA.
-- Edited by Nikole on Sunday 24th of September 2017 09:58:27 PM
You cannot DLA a purchase invoice otherwise it will never actually be paid to the supplier.
Edited - it appears non of it can be DLA'd anyway because it isnt a Limited company, per later posts.
-- Edited by Cheshire on Sunday 24th of September 2017 11:28:39 PM
__________________
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
Completely at ease. The reason I edited my comment is when I googled the company they are showing as LTD but they're not listed on companies house. They will eventually set up as a LTD company so totally my mistake/confusion.
-- Edited by Nikole on Sunday 24th of September 2017 10:32:36 PM
Completely at ease. The reason I edited my comment is when I googled the company they are showing as LTD but they're not listed on companies house. They will eventually set up as a LTD company so totally my mistake/confusion.
-- Edited by Nikole on Sunday 24th of September 2017 10:32:36 PM
Two issues - KYC for one.
The other - this guy really is treading a fine line by the sounds of it. This could be construed as a dishonest misrepresentation under the Fraud Act. Penalties apply (fines, prison). Claiming to be limited when clearly not - could be seen as an attempt to defraud creditors.
__________________
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
Yes I completed all of my necessary checks for MLR purposes and everything was fine. I have been having a mooch on the net this morning and there is only one listing showing them as Ltd. Every other listing is non Ltd. They have recently switched providers for advertising their business so I think this is where the problem has arose.
