Receipts and Freeagent - what's your workflow?

[northernladuk]

Christ. I look like a right dinosaur here. Might have to try these new fangled methods you kids do.

[AndrewK]

Freeagent has API. If you have some history of previous invoices, you could write an app, which uses machine learning to automatically explain your transactions.

[simes]

Confused by the comment re MTD above...I don't think there's any link between MTD and having receipts?!

That would be my comment...

Happy to be corrected but if the receipt contains a VAT element, I was told the receipt had to be entered into the whole MTD system. Ergo, Xero et al.

Yes / no?

[TheCyclingProgrammer]

I've mostly switched to using my Monzo personal account for out of pocket travel and subsistence expenses so I take a photo of the receipt immediately then discard it. I then attach these in FreeAgent when I record my out of pocket expenses.

As a rule I try to keep my out of pocket expenses to a minimum and it tends to only be subsistence. Train tickets I pay for on the company card directly.

For everything else, I do keep records of everything but not necessarily in FreeAgent. It largely depends on the value and the VAT status:

1) For purchases on which I'm reclaiming VAT, I ensure everything has a VAT invoice attached to it when I review my VAT return before submission. The only exceptions are my accountant's invoices and my business broadband/mobile bills, which I enter into FreeAgent as bills - I don't bother downloading the individual invoices from the Virgin billing portal or the invoices my accountant emails me but I have access to them if I need them. I probably ought to download these once a quarter or annually and keep them backed up.

2) For purchases from overseas suppliers that have no UK VAT on, including recurring payments for e.g. online hosting, Github etc. I don't bother downloading the receipts. I record these in FreeAgent as "EC Services" to ensure the reverse charge is calculated correctly.

3) For purchases that are exempt from or outside the scope of UK VAT, I keep receipts wherever possible but don't mind relying on bank statements as evidence for things where it's really obvious what it is (e.g. train tickets) or where the amounts are really small.

[JRCT]

Can anyone on here give me an example of an expenditure that could be challenged by HMRC or your accountant, which they would suddenly be ok with because you have a photograph of a receipt?

Almost everything is online these days. Amazon, hotel websites, etc etc. Even bank statements show the merchant so you can validate these transactions in Freeagent, just as well as through a receipt. More so in most cases.

Unless you've paid actual cash out of your pocket for, say, a taxi. Why would you need to keep a receipt for anything?

[Maslins]

Can anyone on here give me an example of an expenditure that could be challenged by HMRC or your accountant, which they would suddenly be ok with because you have a photograph of a receipt?

Almost everything is online these days. Amazon, hotel websites, etc etc. Even bank statements show the merchant so you can validate these transactions in Freeagent, just as well as through a receipt. More so in most cases.

Unless you've paid actual cash out of your pocket for, say, a taxi. Why would you need to keep a receipt for anything?

Things like an email from Amazon confirming what was bought would be fine.

Just a line on a bank/credit card statement might not be much use on its own. Eg if all we know is you bought something from Amazon, that gives no indication of what it was, hence whether it's plausible as a business cost or not.

[TheCyclingProgrammer]

Can anyone on here give me an example of an expenditure that could be challenged by HMRC or your accountant, which they would suddenly be ok with because you have a photograph of a receipt?

Almost everything is online these days. Amazon, hotel websites, etc etc. Even bank statements show the merchant so you can validate these transactions in Freeagent, just as well as through a receipt. More so in most cases.

Unless you've paid actual cash out of your pocket for, say, a taxi. Why would you need to keep a receipt for anything?

A bank statement entry is proof that you spent something but not necessarily what you bought. If it says “Greater Anglia” then HMRC will probably accept that it was a train ticket.

If it says “Amazon” then it could be anything. So you would need additional evidence like an order confirmation or invoice.

If you are reclaiming VAT then you do need a VAT invoice/receipt regardless.

[JRCT]

Things like an email from Amazon confirming what was bought would be fine.

Just a line on a bank/credit card statement might not be much use on its own. Eg if all we know is you bought something from Amazon, that gives no indication of what it was, hence whether it's plausible as a business cost or not.

The point on Amazon, or anything else online, is that if it was ever investigated it is far less hassle to scroll through my Amazon Previous Orders than a bag of receipts. And far more conclusive.

Any lines on my online bank statement will tell me where I've traded but no less information than a receipt.

I understand that I could, theoretically, have bought a pair of snazzy trainers and not a printer for work but I still say a photograph of a receipt is not necessary in most cases.

If I bought a sandwich for my lunch from a corner shop, which was genuinely claimable under subsistence rules, the chances are that if I ask the shop for a receipt it will just have the date, the cost and the name of the shop. The same as a bank statement.


HMRC will say "What's this £4.50 receipt for?"
Me "It was a sandwich for my lunch when I was working on the client's site".
HMRC "Ok. No problem"

HMRC "What's this £69 bank transaction for?"
Me "The one that I've marked as 'New Printer'?"
HMRC "Yes"
Me "I bought a new printer".
HMRC "How do I know you didn't buy a pair of snazzy trainers?"
Me "Well, the printer's there look on my desk. You're sat next to it."
HMRC "Ok. No problem"
Me "Do you like my trainers?"

[northernladuk]

The point on Amazon, or anything else online, is that if it was ever investigated it is far less hassle to scroll through my Amazon Previous Orders than a bag of receipts. And far more conclusive.

Any lines on my online bank statement will tell me where I've traded but no less information than a receipt.

I understand that I could, theoretically, have bought a pair of snazzy trainers and not a printer for work but I still say a photograph of a receipt is not necessary in most cases.

If I bought a sandwich for my lunch from a corner shop, which was genuinely claimable under subsistence rules, the chances are that if I ask the shop for a receipt it will just have the date, the cost and the name of the shop. The same as a bank statement.


HMRC will say "What's this £4.50 receipt for?"
Me "It was a sandwich for my lunch when I was working on the client's site".
HMRC "Ok. No problem"

HMRC "What's this £69 bank transaction for?"
Me "The one that I've marked as 'New Printer'?"
HMRC "Yes"
Me "I bought a new printer".
HMRC "How do I know you didn't buy a pair of snazzy trainers?"
Me "Well, the printer's there look on my desk. You're sat next to it."
HMRC "Ok. No problem"
Me "Do you like my trainers?"

I have a feeling that conversation won't go quite as you've described there. This is HMRC you are talking about

[SuperLooper]

The point on Amazon, or anything else online, is that if it was ever investigated it is far less hassle to scroll through my Amazon Previous Orders than a bag of receipts. And far more conclusive.

Less hassle still to just type "amazon receipt" or "sandwich receipt" or "snazzy trainers" into the Evernote search box and have it show up in a fraction of a second...