Keep Receipts for expenses?

[zeidman]

I did some work for a client and they paid for some travel expenses. I invoiced them for my fees and for the travel expenses incurred. They did not required the receipts for the travel. Do I need to keep these receipts now for my own accounting or for an HMRC audit?

Thanks

David

 

[Zeno]

Yes. They are still an expense to you so make sure you claim the deduction in your own accounts.

 

[zeidman]

I don't get it. How can I deduct these from my own accounts if they have been paid back by the client? Surely I cannot claim the money back twice.

 

[Zeno]

Ah, see that's where you are wrong. Your client did not pay your travel expenses but paid to you an amount equal to them on top of your charges.

You still incurred the travel costs:-

You pay £10 for a train ticket that you re-charge to your client.

Therefore your sales are £10 higher. Your way you would pay tax on that extra £10 whereas if you include this in your travel & subsistence costs the net effect is £0.

 

[Marky65]

Hi
What Zeno means is that the cost of the travel ie the receipts you have, should be charged as an expense in your accounts and if you do not you will be declaring too much profit and so pay too much tax. I do not mean to appear to be rude but if you are doing your own books and do not understand this point maybe you should seek advice from an accountant/bookkeeper.
Regards

 

[zeidman]

Got it. I use Sage Instant Accounts and when I put the service invoice in I specified travel expenses to hit the travel account so that they would have been deducted from the sale.

So the upshot is that I still need to save the receipts.

Thanks

 

[Anna Chandley]

If you are VAT registered then you should also be charging VAT on the recharged travel expenses. These recharges are turnover for VAT purposes.

Anna

 

[Zeno]

Got it. I use Sage Instant Accounts and when I put the service invoice in I specified travel expenses to hit the travel account so that they would have been deducted from the sale.

So the upshot is that I still need to save the receipts.

Thanks

Remember that if you are registered, you need to charge VAT on the recharged expenses as well.

 

[Zeno]

If you are VAT registered then you should also be charging VAT on the recharged travel expenses. These recharges are turnover for VAT purposes.

Anna

Great minds eh?

 

[zeidman]

Yes, I knew about charging the VAT and did so.

 

[Poupee11]

yes, keep them for your accounts as they are expense to you.

Even, you customer has paid for them. This can reduce your TAX keep them !