Keeping receipts for digital/automated payments

[deeter]

Hi everyone, just wondering what people's experience is with keeping receipts in the case of a digital payment (e.g. initial insurance purchase) or a direct debit (accountancy fees)?

The accountancy fees are automated every month, with no receipt; if HMRC come knocking will the transaction in my bank logs be enough or will I want to request a signed receipt every month?

I also made the initial insurance purchase with my personal credit card (which I'll claim back as an out of pocket expense), however I received an _invoice_ (not a receipt), which doesn't technically prove payment, does it? Should I be requesting a receipt of payment as well? Would a screenshot of my personal bank records with the transaction also be necessary?


(Yes, I'll ask my accountant, but it's currently Saturday)

[Lance]

Digital receipts are generally OK except for VAT reclaims.
You need a VAT invoice for that. Digital is fine also, but a receipt doesn’t usually have the VAT on.

[deeter]

Digital receipts are generally OK except for VAT reclaims.
You need a VAT invoice for that. Digital is fine also, but a receipt doesn’t usually have the VAT on.

Being on the Flat Rate Scheme, I guess the VAT invoice issue doesn't really apply (no major purchases so far), but thanks for the info.

When you say digital receipts, what form are they in (actual receipts, invoices, account transactions...)?

[Lance]

I take photos of receipts and link them to the transaction in FreeAgent. If I have no receipt then a bank statement transaction is proof that you’ve spent the money, just not what you bought. Use that only when no other option.
In general you should be able to get a proper invoice in all cases, but some online vendors can be awkward.

[MrButton]

After your first year (1% FRS discount) it will be worth checking if the FRS is still worthwhile for you.

Im assuming you’ve only just started contracting.

[simes]

I took photos / scanned the receipts prior to now.

From this month, individual photos for Xero.

[oilboil]

I took photos / scanned the receipts prior to now.

From this month, individual photos for Xero.

Xero - great choice - much better than freeagent - although I take the point that it is also more expensive

[TheCyclingProgrammer]

If it’s an online service, and it’s an overseas supplier and the service is clear from the bank statement entry (eg company Github account) then I generally just go with the bank statement entry. I can go online and download receipts if needed but I don’t as a matter of course.

For anything with UK VAT on I make sure I have an invoice or VAT receipt and check this as part of my bookkeeping when preparing my returns each quarter.

Likewise if the bank statement entry on its own is potentially ambiguous or it’s purpose could be called into question I keep a receipt and scan it in.

[deeter]

I take photos of receipts and link them to the transaction in FreeAgent. If I have no receipt then a bank statement transaction is proof that you’ve spent the money, just not what you bought. Use that only when no other option.
In general you should be able to get a proper invoice in all cases, but some online vendors can be awkward.

After your first year (1% FRS discount) it will be worth checking if the FRS is still worthwhile for you.

Im assuming you’ve only just started contracting.

I took photos / scanned the receipts prior to now.

From this month, individual photos for Xero.

Thanks, but I'm talking about when you don't have an automated invoice e.g. my accountant just debits my account...

I've since talked to him, though, and apparently they'll send one invoice at the end of the year for all of the months charged.


I was also curious about the allowability of invoices instead of receipts, since technically they don't prove you've _paid_ (just that payment has been requested).
I'm probably overthinking things, though.

[Lance]

Thanks, but I'm talking about when you don't have an automated invoice e.g. my accountant just debits my account...

I've since talked to him, though, and apparently they'll send one invoice at the end of the year for all of the months charged.


I was also curious about the allowability of invoices instead of receipts, since technically they don't prove you've _paid_ (just that payment has been requested).
I'm probably overthinking things, though.

Yes you’re overthinking it.
If you have an invoice in your books, that’s not been paid, it shows up as a creditor. Once it’s paid it then goes against that creditor, and against your bank balance. That way your books are correct.

It’s called double-entry bookkeeping. It’s how it’s done.