Reply to: Claiming for an Online Subscription - missing invoices

[SueEllen]

Not arguing - I just feel there are a lot of grey areas & from my point of view it's best to be prudent just in case I ever have to argue the toss.

A similar example to yours above - what if I'm on a nightover and I go out for a meal somewhere?

I would argue that HMRC would be interested in what I'd paid for in that they'd expect to see a breakdown showing that I'd had a meal accompanied by one or two drinks rather than I'd just downed 8 pints at the bar & was trying to get a tax free p*ss up.

You are arguing.

You can easily search yourself for what records the government expects you to keep for your accounting purposes. It's all online. You will find what is good enough for the flat rate VAT scheme is good enough for other tax purposes.

As the others have indicated use your commonsense - if you spend loads on a meal while staying overnight because the places are very expensive then yes get a receipt otherwise you will have other proof e.g. meeting emails, hotel booking confirmation that you stayed away.

[missinggreenfields]

Not arguing - I just feel there are a lot of grey areas

And that's how the professionals make their money

[Big Blue Plymouth]

I'm not sure what we are even arguing about here.

Back in my first post on the subject I said it depends what it is whether or not a bank statement is sufficient. Sometimes it will be enough, sometimes it won't. You still don't need a proper invoice, an order confirmation email with the details will suffice.

I don't bother keeping all my receipts when I get lunch at a client site because the receipt doesn't give any more useful information than the bank statement. If I spend £5 in Pret a Manger and that's on my bank statement then that IMO is sufficient as long as I can also show it was related to business travel. HMRC don't need to know if I had a sandwich and coffee or a salad.

Not arguing - I just feel there are a lot of grey areas & from my point of view it's best to be prudent just in case I ever have to argue the toss.

A similar example to yours above - what if I'm on a nightover and I go out for a meal somewhere?

I would argue that HMRC would be interested in what I'd paid for in that they'd expect to see a breakdown showing that I'd had a meal accompanied by one or two drinks rather than I'd just downed 8 pints at the bar & was trying to get a tax free p*ss up.

[northernladuk]

I'm not sure what we are even arguing about here. .

It's because he called you a chicken and you don't know your arse from your elbow and then quickly deleted the post. I wouldn't stand for that.if I were you.

[TheCyclingProgrammer]

I'm not sure what we are even arguing about here.

Back in my first post on the subject I said it depends what it is whether or not a bank statement is sufficient. Sometimes it will be enough, sometimes it won't. You still don't need a proper invoice, an order confirmation email with the details will suffice.

I don't bother keeping all my receipts when I get lunch at a client site because the receipt doesn't give any more useful information than the bank statement. If I spend £5 in Pret a Manger and that's on my bank statement then that IMO is sufficient as long as I can also show it was related to business travel. HMRC don't need to know if I had a sandwich and coffee or a salad.

[Big Blue Plymouth]

Sometimes accountants get the legislation wrong as they are trying to cover all bases.

Scroll down to section 2.2 linky

This has how it's been for years linky and is here as well linky (Notice it says "records" not "receipts" )

There are other obvious exceptions regardless of the VAT scheme you are on e.g. Oyster/chip card payments on TFL where you don't get receipts and if you don't register you don't even get a record of your journey. (Yes it's zero rated for VAT but that's not the point)

.

Actually you have see my link above and TCP is right.

simplified record keeping, as you do not have to keep detailed records of sales and invoices

How detailed do they need to be I wonder...

This all seems to be in the context of VAT though.

I'm claiming expenses to reduce my CT bill. I'm guessing (and I think it's already been mentioned) that whoever could come round to stick their sticky beak in my affairs may be from a different part of HMRC to that which deals with VAT & they'll have their own set of expectations defined elsewhere.

To put it simply, let me use an example. Last month I bought a new external HDD from Amazon. On my statement this just shows as a transaction of £55 to Amazon, Luxembourg. I mean, that could be anything - movies, box sets or whatever. I really struggle to believe that showing HMRC the bank statement would suffice.

[SueEllen]

I spoke with my accountants again & they insist you need the receipts or at least some documentation that shows you paid vendor x for product/service y on such and such a date.

Bank statements alone don't show this IMO.

Sometimes accountants get the legislation wrong as they are trying to cover all bases.

Scroll down to section 2.2 linky

This has how it's been for years linky and is here as well linky (Notice it says "records" not "receipts" )

There are other obvious exceptions regardless of the VAT scheme you are on e.g. Oyster/chip card payments on TFL where you don't get receipts and if you don't register you don't even get a record of your journey. (Yes it's zero rated for VAT but that's not the point)

I suppose if your Ltd has a contract with a provider e.g. BT & money comes out on a regular basis then perhaps producing your contract would be enough without providing an invoice for every month but these things are the exception not the norm, for me at least.

Furthermore, if you can't produce the satisfactory documentation HMRC cam impose fines so surely best practice to keep receipts of everything & back the hell up.

.

Actually you have see my link above and TCP is right.

[Big Blue Plymouth]

One of the benefits of the FRS is you don't need to keep the receipts. But if you were on normal VAT you should only claim for something if you have a VAT invoice.

But that's VAT. One branch of the government rarely talks to the other, so even if you can't claim VAT you could still treat it as an expense and reduce CT and your personal tax. Don't think the rules for one are the same as the other.

I thought the days of contractors sending their accountants a big envelope full of receipts went out with the Ark.

I spoke with my accountants again & they insist you need the receipts or at least some documentation that shows you paid vendor x for product/service y on such and such a date.

Bank statements alone don't show this IMO.

I suppose if your Ltd has a contract with a provider e.g. BT & money comes out on a regular basis then perhaps producing your contract would be enough without providing an invoice for every month but these things are the exception not the norm, for me at least.

Furthermore, if you can't produce the satisfactory documentation HMRC cam impose fines so surely best practice to keep receipts of everything & back the hell up.

Happy now I haven't been wasting my time scheduling backups to multiple HDDs & OneDrive

[TheCyclingProgrammer]

someone could feasibly dispute whether or not it was a relevant/wholly for business train journey though, if they don't know where it was from/to?

They could dispute that even if you still had the tickets or receipt. A ticket doesn't tell you what the journey was for.

It's sensible of course to keep some sort of travel log somewhere.

[VectraMan]

I am on flat rate VAT so all the invoices I have backed up in triplicate over the years is a waste of time if the payee shows on my bank statement?

One of the benefits of the FRS is you don't need to keep the receipts. But if you were on normal VAT you should only claim for something if you have a VAT invoice.

But that's VAT. One branch of the government rarely talks to the other, so even if you can't claim VAT you could still treat it as an expense and reduce CT and your personal tax. Don't think the rules for one are the same as the other.

I thought the days of contractors sending their accountants a big envelope full of receipts went out with the Ark.

[pr1]

(e.g. nobody is going to dispute VIRGIN TRAINS £35 is a train ticket)

someone could feasibly dispute whether or not it was a relevant/wholly for business train journey though, if they don't know where it was from/to?

[SueEllen]

Yes, I've been with Nixon Williams for years and they have always asked this for company expenses.

Mmm interesting.

None of my accountants have ever wanted to see my receipts. They have queried stuff but that's it.

[Big Blue Plymouth]

Does your accountant really want to see receipts for everything?

Yes, I've been with Nixon Williams for years and they have always asked this for company expenses.

[TheCyclingProgrammer]

I am on flat rate VAT so all the invoices I have backed up in triplicate over the years is a waste of time if the payee shows on my bank statement?

I wonder why my accountant wishes to see all my receipts before he signs on my company accounts?

You need some evidence that an expense has been incurred and what that expense was. If that is obvious from a bank statement (e.g. nobody is going to dispute VIRGIN TRAINS £35 is a train ticket) then that is sufficient, if it isn't then an invoice, or an order confirmation email would be better.

Does your accountant really want to see receipts for everything? Mine is content to send me a statement each year stating that receipts/evidence of claims have been kept and that they were legitimate business expenses (amongst other things) which I sign off before my final accounts are produced.

[TheCyclingProgrammer]

So these views contradict.

My current job is a director of a 1 person software consultancy. If I wish to learn e.g. SharePoint I don't see why I can't claim as it is directly related to my job.

Learning plumbing, yes I see that this shouldn't qualify.

Not quite. You can have clear cut examples (e.g. a programmer learning plumbing) but there are less clear cut examples.

Does your business already offer SharePoint consultancy? Is it a skill you already possess and therefore are able to offer to clients? Do you offer anything remotely similar? If not, then there is an argument to say that learning SharePoint is not currently related to your business and is only putting you in the position to offer new services to customers therefore is not allowable.

OTOH if your business is "web development" and you already offer Java and PHP but wanted to learn Ruby or .NET to expand the range of contracts you could take on, then there's an argument to say it's still related to your current business so is just keeping your knowledge up to date and therefore is allowable.

Or if you already have a contract and a requirement comes up mid-project that requires some SharePoint knowledge, say some interface with an external system, then clearly any training materials you buy would be directly related to your current job.

More importantly is whether or not an HMRC inspector would have enough technical knowledge to make the distinction in an inspection. To them they must just see it all as software related and allow it. Who knows, really?

Read the HMRC guidance and make your own mind up.