Walsh Accountancy Services
Telephone: 01424 430814 Mobile: 0780 9875593 Fax: 0871 6619507
e-mail: denise@walshaccountancy.com
accountancy - book keeping - accounts - payroll - VAT - personal tax - self assessment
hastings - bexhill - st leonards - sussex - east sussex - rye - winchelsea
No VAT receipt - no problem
For this VAT period you have expenses shown on your company credit card statement but no VAT invoices to back them up. If you don't include them in the return you might be missing out on Input VAT. So what should you do?
In practice: Even if you do get it wrong and inadvertently reclaim too much VAT it is extremely unlikely that the VATman take any action because an assessment is not issued for errors of less than £250 of VAT.
Tip 1. If the purchase is for under £250 the retailer usually issues a less detailed VAT invoice. This will show a VAT inclusive price but may not show the method of payment used. Use the formula 17.5/117.5 x expense to calculate the VAT included within the credit card transaction expense.
Tip 2. For purchases of over £250 you will need a full VAT invoice in order to recover the input VAT. Crucially, you need the supplier's VAT number, description of goods and a VAT point date.
EXPENSES
Personal travel expenses are just incidental
If you stay overnight on business, how much can your company pay you tax-free to cover "personal expenses" (such as phone calls)? What happens if the company overpays you by accident?
Tax-free limits
The limits: Personal incidental expenses can be paid tax-free up to a permitted amount. This is the aggregate of either £5 for each night during the period spent wholly in the UK or £10 per night for each night during the period spent wholly or partly outside the UK. (Both are VAT-inclusive amounts.) The employee has to stay away from home for at least one night.
What's included? The exemption covers small things such as the costs of a telephone call home and a newspaper, i.e. items that would not otherwise be deductible.
Trap: The exemption is all or nothing. Firstly, the employee can't claim a tax deduction for the expenditure. The allowance has to be paid by an employer, who then gets a tax deduction for it. Secondly, if the limit is exceeded, then the whole amount is taxable, not just the excess.
Tip: Always pay the incidental expenses amount. However, you can pay more than the limit for one or more nights, provided that the overall amount for a trip does not exceed the exemption.
Return to Top