What does everyone do for this on VAT Returns. I always add up all the receipts I have but it takes for ever, or do you just do £5 per day?
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MF - "Hey, Mr ExciseMan, I really can't be arsed to keep proper records or do all that tedious paperwork, so can I just pay you the first number I thought of and hope it's about right?"
Your client - "Hey, Mr MF, thank you for your work for us last month, we didn't bother reading your timesheets or know how much you did, so here's £230 - we think that will cover it."
Which one is the better approach do you think? Hint: the first one puts you in jail for fraud...Blog? What blog...? -
Malv. Its just I keep seeing threads popping up about certain umbrella companies saying they have dispensation.ie. Giant
A contractor I know is putting in £25 per day expenses on the word of his umbrella company withot receipts. I thought this was bollocks but he is convinced it is correct and I have seen posts on here doing the same.
So what is it?What happens in General, stays in General.You know what they say about assumptions!Comment
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Originally posted by MarillionFanWhat does everyone do for this on VAT Returns. I always add up all the receipts I have but it takes for ever, or do you just do £5 per day?
By my back of a fag packet calculations* if your expenditure is less than about 11% of turnover then you will be financially better off being in this scheme as well as not having to bother adding up the receipts for your expenditure for VAT purposes.
* assuming turnover is less than £150,000 and you can apply for the scheme and you fall into the 13% band for Computer and IT Consultancy.
Usual disclaimer - IANAA etc etc.
Who gives you a VAT receipt for your lunch in any case?Comment
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"Who gives you a VAT receipt for your lunch in any case?" - The canteenWhat happens in General, stays in General.You know what they say about assumptions!Comment
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Originally posted by MarillionFan"Who gives you a VAT receipt for your lunch in any case?" - The canteenComment
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Originally posted by MarillionFanMalv. Its just I keep seeing threads popping up about certain umbrella companies saying they have dispensation.ie. Giant
A contractor I know is putting in £25 per day expenses on the word of his umbrella company withot receipts. I thought this was bollocks but he is convinced it is correct and I have seen posts on here doing the same.
So what is it?
Things to remember #2: If you screw up, you get fined, not them. They don't care.
You may not need receipts to give to the umbrella, that's up to them (and it's your money they're spending so they also don't care) and they won't have to provide receipts to the taxman when they pay off their VAT bill. That's why they have the dispensation: it's nothing to do with you.
However, you will have to prove the expenditure if you get audited for VAT, so you need to keep the receipts for everything you have claimed. Fail to do so and (a) they will make an assessment of what you owe, (b) you will be fined (or worse) and (c) you will find youself in the middle of an IR35 investigation just for fun.
Even under the flat rate scheme you should keep an audit trail, even if you don't have to account for it.Blog? What blog...?Comment
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Originally posted by MarillionFanMalv. Its just I keep seeing threads popping up about certain umbrella companies saying they have dispensation.ie. Giant
A contractor I know is putting in £25 per day expenses on the word of his umbrella company withot receipts. I thought this was bollocks but he is convinced it is correct and I have seen posts on here doing the same.
So what is it?His heart is in the right place - shame we can't say the same about his brain...Comment
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Originally posted by malvolioThings to remember #1: The umbrella is a service organisation, not a source of advice and guidance or, in many cases, even good practice
Things to remember #2: If you screw up, you get fined, not them. They don't care.
You may not need receipts to give to the umbrella, that's up to them (and it's your money they're spending so they also don't care) and they won't have to provide receipts to the taxman when they pay off their VAT bill. That's why they have the dispensation: it's nothing to do with you.
However, you will have to prove the expenditure if you get audited for VAT, so you need to keep the receipts for everything you have claimed. Fail to do so and (a) they will make an assessment of what you owe, (b) you will be fined (or worse) and (c) you will find youself in the middle of an IR35 investigation just for fun.
Even under the flat rate scheme you should keep an audit trail, even if you don't have to account for it.
On the unreceipted expenses bit, they claim to have an agreement with HMRC that certain amounts are "de minimis" and don't need receipts - it sounds reasonable, as I had exactly the same thing in my permie days - we were allowed to claim hotel expenses, up to a certain maximum, and £10 - 15 a day, without receipts, for meals and incidentals - you could claim more for meals if you had receipts to prove that you'd spent more (again there was a limit).Life is just nature's way of keeping meat fresh
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Originally posted by hattraOn the unreceipted expenses bit, they claim to have an agreement with HMRC that certain amounts are "de minimis" and don't need receipts - it sounds reasonable, as I had exactly the same thing in my permie days - we were allowed to claim hotel expenses, up to a certain maximum, and £10 - 15 a day, without receipts, for meals and incidentals - you could claim more for meals if you had receipts to prove that you'd spent more (again there was a limit).Last edited by Lucifer Box; 29 October 2006, 05:42.Comment
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