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Post Info TOPIC: purchases/ expenses without VAT invoice


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purchases/ expenses without VAT invoice
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Hi all,

I have a general question. Where do you usually put expense or purchase on the VAT return if no VAT invoice is provided?

I think we still need to include the amount in box 7 purchases even we haven't claimed VAT and they are not out of scope.

Nina



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Hi Nina
I would chase the invoices and receipts - hound them!!!!! Especially if it is supposed to be a proper invoice as you are entitled to a VAT invoice (I usually threaten with getting the VAT man involved if they refuse to provide one - usually does the trick!) Besides how can you know for sure that it is always a business expense that should be reported in the first place without a correctly addressed document, showing what the thing is for?

 



-- Edited by Cheshire on Tuesday 2nd of May 2017 08:41:24 PM

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Hi Joanne,

I agree with you but reality is that we don't receive VAT invoice for everything. Sometimes is an order only or receipt. The question is if we have these documents and you don't claim VAT based on that is not proper VAT invoice - if you claim mileages for instance - do we include them in box 7. What do you think?

Nina

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Hi Nina, personally I would code them either to T1 but with zero VAT, or T0, again with zero VAT.

In either case the value of the goods will go into box 7.


Just my opinion, yes, you should get a VAT invoice or receipt, but I know from experience it doesn't
Always happen.

Eunice


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Eunice Cubbage



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NinaKoni wrote:

if you claim mileages for instance - do we include them in box 7.


If you intend to claim VAT then you must have a VAT receipt.

That one's been covered a lot but as an example see this thread : http://forum.bookkeepers.network/t63276832/vat-on-fuel-element-of-mileage-allowance/

Remember that there is never an excuse for you not to issue a VAT invoice or to be able to produce one when required. You know that you will have collected the correct amount with the correct documentation.

So, to not have all of the documentation for expenditure to set against the income is reducing the amount you pay to HMRC without proper documentation to state why you are retaining their money.... So in principle, theft of HMRC's moneyt that you have collected for them.

Simplistic view there yes but fundamentally correct.

No documentation, no expense.

kindest regards,

Shaun.



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NinaKoni wrote:

Hi Joanne,

I agree with you but reality is that we don't receive VAT invoice for everything. Sometimes is an order only or receipt. The question is if we have these documents and you don't claim VAT based on that is not proper VAT invoice - if you claim mileages for instance - do we include them in box 7. What do you think?

Nina


Ditto what Shaun said.  No receipt for vat means you also shouldn't be putting it through for a CT reduction. Just storing up trouble for a HMRC inspection.

in reality, allow the business to get away with not getting receipts and having sloppy processes just makes them even more complacent and then you get an increase in missing bits of paper.  I tell the 14-18 year old Explorer Scouts 'no receipt, no claim'. They bring in a 49p bottle of milk with no receipt then the milk cost has come out of their own pocket money, or they go back and get a receipt, a life lesson and one they don't repeat after the first time.

Re your comment 'sometimes is an order only or receipt', can you explain further? The receipt first....are you saying you are getting a simplified receipt, rather than a full blown A4 vat receipt? Can you give an example. I suspect that these are vat receipts, by virtue of eitherr he fact they have a vat number on and follow the simplified receipt rules or a receipt from a non vat registered entity?

re the order, again a more detailed example might help. Why and from whom would you order something and not get any kind of paperwork? Or are you meaning something paid for on proforma?

 



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



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We get this a lot when engineers order materials from the internet, you get an order confirmation and no VAT receipt. We tell them that even if the price of something is cheaper on the internet if the VAT can't be claimed back (which it can't without a receipt) then it ends up costing the company more. Hotel bookings via a particular website is the worst along with industry registrations.



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Julie



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"re the order, again a more detailed example might help. Why and from whom would you order something and not get any kind of paperwork? Or are you meaning something paid for on proforma?"

If it's anything like a few of my clients, it'll be print outs of order emails from Amazon and things like that - but using Amazon specifically as the example:

Because they don't automatically send out invoices by email, people who [ know no better / are too bloody lazy* ] think the email that comes out confirming the order is an acceptable alternative, and don't habitually log-in to either print (if the item is from Amazon themselves) or request (if the order is from someone selling through Amazon) the invoice.

(I was somewhere recently where I'd written instructions to do that on a printed order confirmation. That confirmation with those instructions are still in the guy's in-tray after about six months.)

Personally, I think any company selling online should be legally required to *both*

  • supply an invoice by email to the email address supplied by the customer once the order is complete, payment taken, and the goods (or services) provided
  • and provide a way to retrieve copies of the invoice from their website at a later date if needed. (This because email delivery of anything is not guaranteed)

Also, in the case of Amazon (and others who offer similar 'marketplace' type services), they have details of all their marketplace sellers, including whether or not they are VAT registered, and their VAT numbers if they are. They could automatically issue invoices on behalf of the sellers to make things much simpler - and therefore, SHOULD do so.

And for the OP (and anyone else in a similar situation), here's a good reason why an order, confirmation, or whatever is NOT an acceptable alternative:

Just imagine I'm a dodgy geezer with my own business - and I see something at an online retailer that I want for my home, which costs (say) £60.00 including VAT. That VAT is not reclaimable.

That retailer also sells stuff that I could use in my business. I find an item (or a selection of items) to the value of £60 including VAT. As soon as I get the order confirmation I print it, and cancel that order. I then order the item I want for my home.

Now, because my bookkeeper simply accepts that "we don't get the receipts or invoices for everything" and will make do with order confirmations, I can reclaim £10 worth of VAT from an order that was never fulfilled (because I cancelled it) - but it looks right because there's a payment going out for the full amount, paying for what I bought for my home.

The only way to avoid things like this is to Insist on a VAT receipt or invoice, or simply disallow it.

* Delete as appropriate

Edit: Forgot the footnote!



-- Edited by VinceH on Wednesday 3rd of May 2017 09:30:29 AM

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pictures wrote:

We get this a lot when engineers order materials from the internet, you get an order confirmation and no VAT receipt. We tell them that even if the price of something is cheaper on the internet if the VAT can't be claimed back (which it can't without a receipt) then it ends up costing the company more. Hotel bookings via a particular website is the worst along with industry registrations.


Hi Julie:  If you buy something say for £100 + VAT and you can buy it on the net for £85 but no VAT receipt that saves the company £15 surely? 

If you're thinking of the hotel website I'm thinking of (rhymes with a swear word) then it's not down to the website, it's up to the guest to request a VAT receipt from the hotel concerned.

 

Hi Vince:  Agree fully with you and I do the same with Amazon and ebay orders.  I use the print out as proof of payment and if there's no VAT on it then tough, I don't allow the VAT element but still put the purchase through.  Thanks for the heads up on the scam, that's something I wasn't aware of.



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[Aside: Now this is something I've never seen before: My earlier post was written and posted from my Linux desktop machine at home, and it appeared without any problems. I've logged in now on my Windows laptop - and when I went to the advanced editor, the form was populated with my earlier post, as if it was still draft/unposted. Anyway...]

"If you buy something say for £100 + VAT and you can buy it on the net for £85 but no VAT receipt that saves the company £15 surely?"

I suspect it's more a case of they can buy something for £120 including VAT, and see it online for (say) £114 - so it looks cheaper. However, that £114 might be from a supplier who isn't registered for VAT, and/or it may be a situation where they have to chase up a VAT invoice but don't. Bottom line in this case is that instead of saving £5 (the difference in the net) they've cost themselves £14 because they can't claim back the VAT until/unless they get a VAT invoice.

When you get to even lower value items it becomes more of a pain. When business owners try to save money like that on items that cost just a few quid, and then have to spend their time chasing or retrieving invoices, even if they manage to get a suitable invoice, the cost of their own time (as well as ours, usually) means there is no saving, and they've actually cost the business more than they've saved in VAT.

Like I said before: It should be a legal requirement to SEND VAT invoices/receipts by email for stuff purchased online, which would avoid the messing around and wasted time and money in most cases.

"Thanks for the heads up on the scam, that's something I wasn't aware of."

It's not so much a scam I've seen in the wild, but it's always struck me as an 'obvious' way to cheat the system, so it's worth laying it out as yet another reason to insist on the right pieces of paper (or PDFs!)

 



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Well yes with those figures you would save but I am talking of instances where something may be £1000 including VAT and you can claim it back or £900 including VAT but you can't claim it.

The hotel websites vary. With booking.com your VAT receipt comes direct from the hotel as they are just acting as a kind of agent taking commission. We make the booking (I always check if its cheaper to go direct) then request the hotel provides a VAT invoice on checkout. Their terms and conditions state that your contract is with the hotel direct so they are the supplier.

However there is one website I think it is hotels.com that isn't VAT registered (quite how I am not sure I think its a loophole something to do with the Tour Operators Margin Scheme ) but your booking is with them, not the hotel direct so no VAT receipts can be provided as your contract is with them as a reseller of services, not the hotel.



-- Edited by pictures on Wednesday 3rd of May 2017 12:48:30 PM

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Julie



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That is a rude word John! lol.

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VinceH wrote:

[Aside: Now this is something I've never seen before: My earlier post was written and posted from my Linux desktop machine at home, and it appeared without any problems. I've logged in now on my Windows laptop - and when I went to the advanced editor, the form was populated with my earlier post, as if it was still draft/unposted. Anyway...]

"If you buy something say for £100 + VAT and you can buy it on the net for £85 but no VAT receipt that saves the company £15 surely?"

I suspect it's more a case of they can buy something for £120 including VAT, and see it online for (say) £114 - so it looks cheaper. However, that £114 might be from a supplier who isn't registered for VAT, and/or it may be a situation where they have to chase up a VAT invoice but don't. Bottom line in this case is that instead of saving £5 (the difference in the net) they've cost themselves £14 because they can't claim back the VAT until/unless they get a VAT invoice.


In that case the one on ebay is £14 dearer so yes obviously that makes sense.  In general though there's more of a saving buying online that getting it from bricks and mortar places. A case in point, I can buy a pair of headlight bulbs on ebay for £5, with free postage, but if I go to Halfords they're £20.  That's a <sounds like a hotel website> 4 fold increase biggrinbiggrin



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pictures wrote:

Well yes with those figures you would save but I am talking of instances where something may be £1000 including VAT and you can claim it back or £900 including VAT but you can't claim it.

The hotel websites vary. With booking.com your VAT receipt comes direct from the hotel as they are just acting as a kind of agent taking commission. We make the booking (I always check if its cheaper to go direct) then request the hotel provides a VAT invoice on checkout. Their terms and conditions state that your contract is with the hotel direct so they are the supplier.

However there is one website I think it is hotels.com that isn't VAT registered (quite how I am not sure I think its a loophole something to do with the Tour Operators Margin Scheme ) but your booking is with them, not the hotel direct so no VAT receipts can be provided as your contract is with them as a reseller of services, not the hotel.



-- Edited by pictures on Wednesday 3rd of May 2017 12:48:30 PM


 I was thinking of booking. com. I've never used hotels. com.  Yes I agree on your scenario, and tbf not everyone will know to take the VAT into account when working out which is cheaper.



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Not sure if Nina has been back on since all the responses as she has gone quiet, but the other option that Ive said before that works is the 'it goes to your DLA/drawings' if you dont get a receipt which often focusses the mind enough for them to get the right paperwork.

One of my clients use bookings for the same hotel group - I have a hotline to the Hotel's accounts department and they send me the invoices without having to ask - now there is service for you!

Hotels com are not VAT registered as they too are an agent so you should be able to get VAt invoices/VAt receipts from the individual hotels themselves, although some small B&B type places may well not be VAT registered - INSIST, usually works as Ive found some hotels do try the fob off!



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position

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