receipts vs credit card/bank statements

[ASB]

I'll check how much i have receipts for, put them in , then make a decision on the remaining

The decision I would (and always did) make on the remaining would be to claim it based on the entries in my diary. If it's a few things at reasonably small prices HMRC wont give a damn normally (assuming you are reasonably clean in general of course).

[SueEllen]

If you are not on flat rate VAT then you need a VAT invoice otherwise you need proof of purchase. The exception are goods over £2k.

I have a lot of online transactions so my proofs are often emails detailing the exact item plus a card statement to prove I brought them.

Oyster cards/contact less card transactions are another occasion where you won't have a receipt. So you either show your TFL statement or again use a credit/debit card statement.

In regards to small amounts e.g. food a lot of small retailers will not give an itemised receipt. So while you will have a receipt with a VAT number on it it won't be especially useful to determine the item purchased.

They will only scrutinise small amounts if you do crooked things with larger amounts or keep buying goods which you can't prove are for your business.

BTW I was told all this on the useful VAT course I went on run by HMRC.

[ASB]

If you are not on flat rate VAT then you need a VAT invoice otherwise you need proof of purchase.

Proof of purchase is adequate for tax purposes.

It can be acceptable for VAT reclaim purposes too.

VIT31200 - How to treat input tax: alternative evidence for claiming input tax

[moneymoney]

If you are not on flat rate VAT then you need a VAT invoice otherwise you need proof of purchase. The exception are goods over £2k.

I have a lot of online transactions so my proofs are often emails detailing the exact item plus a card statement to prove I brought them.

Oyster cards/contact less card transactions are another occasion where you won't have a receipt. So you either show your TFL statement or again use a credit/debit card statement.

In regards to small amounts e.g. food a lot of small retailers will not give an itemised receipt. So while you will have a receipt with a VAT number on it it won't be especially useful to determine the item purchased.

They will only scrutinise small amounts if you do crooked things with larger amounts or keep buying goods which you can't prove are for your business.

BTW I was told all this on the useful VAT course I went on run by HMRC.

thanks, very useful to know

[SueEllen]

Proof of purchase is adequate for tax purposes.

It can be acceptable for VAT reclaim purposes too.

VIT31200 - How to treat input tax: alternative evidence for claiming input tax

The most important two rules I was told which I forgot to mention, are:
1. go online and read the appropriate HMRC leaflets if you are stuck, and,
2. you are responsible for your accounts not your accountant

[TheCyclingProgrammer]

Assuming you're on the FRS and therefore not claiming VAT, then I think this largely depends on what you've bought.

My accountant has told me that the in some circumstances a bank statement is enough to prove an expense was incurred.

You need a) proof that the purchase took place and b) reasonable evidence of what that purchase was.

If I buy a piece of business equipment from Amazon.co.uk then HMRC are going to want to see more than a bank statement showing "AMAZON - £XXX" as it could be anything.

However if you've bought a train ticket for business travel then the receipt isn't really going to tell you anything that couldn't be reasonably determined from the bank statement - if a return ticket costs £30 and you have a bank statement showing "Abelio Greater Anglia - £30" then HMRC are unlikely to query it as being anything other than a train ticket. The ticket still has to be for business travel but a receipt is no proof of that.

I keep all my subsistence receipts and invoices for anything I buy on the company card (I upload them to FreeAgent). However I don't see the point in keeping all my train tickets (they are all booked online anyway so I do have email receipts if HMRC really want to see them).

Obviously if you are reclaiming VAT then you should obtain a valid VAT invoice/receipt.

Ultimately its about common sense. A bank statement showing the purchase is a starting point - if you think it could be questioned then also keep the receipt. For all company purchases I make a point of keeping invoices made out to MyCo to show it was bought in the company name (especially if for some reason I've had to pay for it on my own personal card on the company's behalf, to avoid any nasty P11D issues).

[northernladuk]

Going back to the original example I would also maybe ask your accountant about the frequency and legitimacy of buying your client a coffee or a Sprite. There is a finebline where this is either business entertainment or subsistence.

All that said there is no tax relief on business entertainment is there? So there is very little saved putting it through the company. You should be buying your client coffees, pop and the odd beer out of good manners.

Good read on it here

http://www.freeagent.com/central/exp...-entertaining/

[TheCyclingProgrammer]

I think it's important to distinguish between a business expense in your accounts and a tax deductible business expense.

Just because corporation tax relief is not available on business entertaining, this doesn't mean it isn't a valid business cost. IMO it's perfectly OK for legitimate business entertaining (particularly if it's in the course of getting new clients) to be out through as a company expense rather than paying it out personal income. You will need to disallow it when calculating your taxable profits but it means more money left in your pocket.

[northernladuk]

Very factual as always TCP but application to the situation stated?

[SueEllen]

Very factual as always TCP but application to the situation stated?

Yes because the OP has absolutely no clue what they need when and why plus has been given generic advise by their accountant.