Keeping Receipts for those Flat rated....

[Rivendell]

Hi,

What's the general rule for keeping hold of fuel and other expense receipts when you're flat rated for VAT? Are you ever likely to be asked to to use them?

Thanks
Alan

[northernladuk]

We had a big to do about this not so long ago. In a nutshell I think the answer was

50% don't bother and believe you will never be asked and it doesn't matter anyway
50% keep them but don't believe they will be asked for them
and 50% kept them and believed it would help speed up an investigation in their favour if they could produce a big bag of them.

I keep them, stick them in a big bag. If no one asks for them I haven't wasted much time, if I get investigated and he takes one look and ticks me off it was worth it's weight in gold. Deep down I know I will never have to produce them but effort is nil so do it.

[SueEllen]

Hi,

What's the general rule for keeping hold of fuel and other expense receipts when you're flat rated for VAT?

I don't keep fuel receipts simply because my car is the car I use to get around generally and I can buy fuel to go to a client site or fuel to go somewhere non-business related. Plus I have car service records which should be less than my mileage log plus other receipts, emails and documents showing when I'm on a client site.

Other receipts I keep simply as I have no other proof to show what I spent the money on.

[mudskipper]

50% ...
50% ...
and 50%....

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[MarillionFan]

We had a big to do about this not so long ago. In a nutshell I think the answer was

50% don't bother and believe you will never be asked and it doesn't matter anyway
50% keep them but don't believe they will be asked for them
and 50% kept them and believed it would help speed up an investigation in their favour if they could produce a big bag of them.

I keep them, stick them in a big bag. If no one asks for them I haven't wasted much time, if I get investigated and he takes one look and ticks me off it was worth it's weight in gold. Deep down I know I will never have to produce them but effort is nil so do it.

What Mr 150% says.

[Waldorf]

I keep mine!

I think there are two sides here, being on the flat rate scheme, I do not reclaim any VAT, so for VAT purposes I do not need receipts.

However, for the support of my accounts with HMRC and to backup my claim when working out my profit, you will need receipts in case they (HMRC) ask to see them.

When I asked my accountant if I do need them, she told me that, yes I do need them, the reason why I have not been asked about them, is just luck, HMRC may choose to look into this area by chance or due to some questionable claim.

[Nixon Williams]

Hi,

What's the general rule for keeping hold of fuel and other expense receipts when you're flat rated for VAT? Are you ever likely to be asked to to use them?

Thanks
Alan

As someone has already covered, for the validation of your VAT returns, if you are on the flat rate VAT scheme, then you will not need to produce copies of receipts etc unless you have reclaimed VAT (this would generally only be a capital asset costing at least £2000).

The VAT inspection would simply look at your income and check that you have declared the correct values at the right time etc.

However, in order to support your accounts and claim corporation tax relief, you will need to retain receipts to show that you have incurred the expenses you have claimed.

If you have 'lost' an odd receipt there should not be an issue, but if you do not have any, then this will clearly arose suspicion with HMRC.

Lastly, how likley is it that you will be inspected by HMRC? Well it is true that HMRC enquiries/inspections are rare and generally these are started by very large claims and costs/expenses that look out of place. There is also an element of chance, that your company will be picked on for a spot check.

Our advice is to make reasonable claims but to ensure that you retain the receipts for 6 years. I would not recommend a carrier bag! An efficiently ordered set of records can go a long way to satisfy HMRC that everything is in order and that they do not need to spend too much time digging for information.

I hope this helps.

Alan

[malvolio]

Also, don't foget the looming "Business Records Checks". They could nasty if there are no supporting documents for expenditures...

As others have sadi, they don't have to be filed in any kind of order, as long as you have them.

[TheFaQQer]

I've started to use Expensify on my phone and online - take a photo of the receipt and it uploads it for you.

If you pay, it will also OCR it and store the amounts in an expense report for you, or you can put them in manually.

[psychocandy]

Never understood the need to keep fuel receipts if you're on flat rate VAT. After all, you're not reclaiming any VAT.

Last accountant (the crap one I got rid of) told me I had to keep petrol receipts to prove I was actually putting petrol in my car and not just claiming mileage and not paying for petrol. Not sure what else they thought would power my car....

But then again, whats stopping me biking it to client all week, claiming mileage, filling car up with petrol at weekend and using it all and then producing receipt? Pointless waste of time.

Crap accountants. When I heard this from them I knew it was time to drop them.....

And the fact they thought that HMRC won the Arctic case and because of this you could only split the shares in the company based on the amount of work each shareholder did. WTF. (I did try to explain that I've got a fair load of Halifax shares but they've never told me I have to pop in to the branch now and again to do some filing!).