Losses

[BlasterBates]

To clarify, I am not asking for advise on how I can recover this money, purely from a accounting perspective.


So the agreement was two days travel @ std rate and the 4 days work was supposed to be

This 27% was referred to as "the uplift" by my manager and in correspondence, specifically because initially i was prevented from going on this trip as they had no mandate to allow contractors to receive this uplift. However, had I not gone the trip would have been cancelled and it would have been very expensive and embarrassing for client.

So when they realised the outcome, they took it upstairs to more snr staff who greased the wheels and allowed me to travel. I have in writing from a number of employees of the client, all managers and all snr to me, regarding the change and approval to travel and again referring to this as "the uplift". The 15 other employees who travelled also received the same uplift rate, hence "The Uplift".

Only when I returned and received my lower than expected pay and investigated did they state, I'll paraphrase "oh the uplift, no you dont get that uplift we created a new uplift just for you". This was not communicated to me nor the agency.

This meant they paid me the 27% but only outside of the hours i would normally work, so about a quarter of what i expected.

Obvs there is nothing i can do other than coax/cajole or sue. The latter would loose me the contract so I am comfortable that this is one of those things to learn from. No point being angry and out of pocket.

So basically, this is not me trying to make a fast buck by cooking my books, this is a legitimate situation where I am asking if this discrepancy can be called 'a loss' - I dont really know what a loss and how it benefits to a company to write off losses, so that is what i am interested in...

Thanks all

Obviously for business reasons you accept there was a misunderstanding. You need to reissue the invoice. Your accountant will advise.
However it should just be simply a case of writing a letter to the agency cancelling the previous invoice and sending a new one. This will be accepted by any tax inspector should they decide to audit the accounts as it will be backed up by the bank statements. Your accountant will ensure your books and records are updated accordingly. The fact that an invoice is resent after a bank transfer isn't of any importance.

[Lance]

However it should just be simply a case of writing a letter to the agency cancelling the previous invoice and sending a new one. This will be accepted by any tax inspector should they decide to audit the accounts as it will be backed up by the bank statements. Your accountant will ensure your books and records are updated accordingly. The fact that an invoice is resent after a bank transfer isn't of any importance.

it's called a credit note. Standard practise. No letter needed.
The agencies accounts department will take it from there.

[mike67]

IANAA but doubt it will be counted as a bad debt for accounting purposes if you reissue the invoice or issue a credit note. The amount you are paid will be the amount you invoice (on the reissued invoice) so from an accounting perspective it is kushti.

[mike67]

On the positive side, however, this could help you for IR35 purposes in the future as being screwed over by a client helps demonstrate that you are a legitimate business rather than a disguised employee. A small silver lining?

[northernladyuk]

On the positive side, however, this could help you for IR35 purposes in the future as being screwed over by a client helps demonstrate that you are a legitimate business rather than a disguised employee. A small silver lining?

Hmmm. As IR35 is on a per-contract basis, it may be useful for demonstrating that that particular contract was outside IR35.

[Cirrus]

I have always worked on a cashflow basis ie the accounts are based on the money that actually came in, not on figures on invoices. You're allowed to do that.