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UK Tax Question - Do you really need invoices for expenses?

by theemperor
4 replies
Hi All

I have a record of my expenses, but I don't necessarily have invoices for every expense. I do have screenshots of payments and such. Some are done online, some were from a shop (reciept not invoice).

Will the tax man be fussed about this?

:confused:
#expenses #invoices #question #tax
  • Profile picture of the author KenJ
    Hi

    In my experience the UK tax and Vat offices like receipts/invoices.

    If you show them 221 payments for the year and only have 216 receipts you will be fine. If you only have 99 receipts you are in big trouble. It looks like you are pulling their chain - and you probably are.

    If I buy online I immediately print out the order form and the email confirmation as my receipt/invoice.
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    • Profile picture of the author Janet Sawyer
      Originally Posted by kenj View Post

      Hi

      In my experience the UK tax and Vat offices like receipts/invoices.

      If I buy online I immediately print out the order form and the email confirmation as my receipt/invoice.
      And that's darn good advice.

      Always have proof of expenditure. If you don't have it you can't claim it.
      Anyone who has ever undergone a VAT or TAX (and they are both the same department now HM Revenue & Customs: Home Page) will know how serious they are when they call on you.

      If your paper trail isn't correct, then you can't prove your records are either. And guess which side they usually come down on.

      Get yourself organised, get your paperwork in place and get a good accountant.
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      • Profile picture of the author takahashii
        Sorry to hijack this post, but I have a question too:

        95% of all my expenditure on my business is through paypal, say for article writing, logo creation etc much of which goes to India, Canada, USA.

        I have created a spreadsheet with all my outgoings and stated what they are for, copied from Paypal. I also have the paypal account that I could refer to at anytime.

        Is this enough evidence (of expenditure) for Mr Taxman?
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        • Profile picture of the author Riz
          Paypal can be used as your tracking.

          However, it is always best to back it up with an invoice. Ask your outsourcers to create an invoice for you via Paypal.

          When it comes to tax investigations it is always best to have everything in order.

          My Father, several years back failed to keep his paperwork in order and could not prove £10k of expenditure (or sales, can't remember which) - the fine was hefty and then they backdated the tax owed claiming he must have been hiding 10k profit for many years.

          The fine was £200k, reduced to £25k after extensive work by his Accountant.

          He never actually done anything wrong or illegal, just couldn't show a paper trail which matched his accounts.

          So my advice - always keep your paperwork in order and hire a good Accountant.

          Riz


          Originally Posted by takahashii View Post

          Sorry to hijack this post, but I have a question too:

          95% of all my expenditure on my business is through paypal, say for article writing, logo creation etc much of which goes to India, Canada, USA.

          I have created a spreadsheet with all my outgoings and stated what they are for, copied from Paypal. I also have the paypal account that I could refer to at anytime.

          Is this enough evidence (of expenditure) for Mr Taxman?
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