Tea/Coffee/Milk

[tony84]

I have just been to the shop and picked up some bits. Whilst there I got some of the above for the office.
I paid for it myself as I always have but it was nearly £20 (I was in waitrose!). Im not overly bothered but I think its the first time in a while I have bought all 3 at the same time.

If I start buying this through the business do I actually need to keep receipts?

I know it might be an odd question after 14 years, but everything I normally buy for the business is online so I always have receipts via email. I hate scraps of paper and I know if I take a photo when it comes to doing my accounts in 12 months time I will have no idea what the transaction is. Basically for the sake of about £15 in tax savings throughout the year, I CBA faffing about with receipts. Is it a major problem if there is about £60 throughout the year at supermarkets?

I probably know the answer which is why I have always just bought them myself.

 

[DWS]

If you have an office then why not do it properly as you would with any other supplies and be pay for it through the business?
As you said for the sake of the money involved I don’t suppose anyone would care but if you looked at it that way for every purchase it would soon add up!

 

[tony84]

When we are running low, I just bang an extra tea or coffee on my shopping to take to the office.

For the sake of a coupe of quid I am not overly bothered. I could have paid for them on my business card but I know what will happen. In 12 months I will be going through transactions and thinking what it was. Cross referencing with receipts is not my idea of fun and for the sake of a couple of quid, its not worth it.

But I am just thinking for future, every time there is a transaction at a supermarket I know it will be tea of coffee - thats fine for me. But if I have to start keeping receipts then I just cant be bothered. If there is an element of trust as it would literally be £60-70 a year which is £12-14 in tax! then fine, I will do that in future. But if not, I will just carry on as is.

 

[DontAsk]

Pay by company card and the bank transactions are cross referenced in your accounting software, or should be.

You should be doing your bookkeeping far more frequently than every 12 months. Once the transaction is logged against the appropriate exchange you can forget about it.

 

[tony84]

Pay by company card and the bank transactions are cross referenced in your accounting software, or should be.

You should be doing your bookkeeping far more frequently than every 12 months. Once the transaction is logged against the appropriate exchange you can forget about it.

It only shows the company I paid, not what was bought.

I dont use accounting software. I just download 12 months CSV file, go through the transactions. If I buy a laptop from amazon for example, I change the name from Amazon to Laptop so my accountant knows what it is. It doesnt take me long and I do it all in one go. If I dont know what I bought from amazon, I go and check my account to see what it was. I dont want to be doing that with bits of paper.

It might not be conventional, but its works for me.

 

[numbersrule]

You say you're not really bothered, and yet you've taken the trouble to post this thread.

I therefore infer that you are secretly a real stickler for detail and you really want this to be done exactly as it should be. No ifs no buts.

In the case of your personal purchases, you should process a claim for expense reimbursement.

Step 1 : Record Tea + coffee + milk = £20. Put it on an Excel tab, date it and save it.
Step 2 : Photo the receipt and insert it as an image in the corner of the Excel tab.
Step 3 : Process a payment of £20 from the business bank account to your personal account with a reference of Tea.
Step 4 : At end of year, in your .csv download, there will be a line item for £20 referenced as Tea, which will then be a business expense that is tax deductible.

Are thete any other bookkeeping items that are troubling you?

 

[DontAsk]

Twelve months is a long time to go without reconciling accounts.

Who's going to ask for the receipt?

Do you have an accountant?

 

[WaveJumper]

Buy it from Amazon and you will get reminders. Then perhaps look through your whole business and see if there is anything else thats "falling through the cracks" all these little things add up and of course could be offsetting some tax liabilities

 

[tony84]

You say you're not really bothered, and yet you've taken the trouble to post this thread.

I therefore infer that you are secretly a real stickler for detail and you really want this to be done exactly as it should be. No ifs no buts.

In the case of your personal purchases, you should process a claim for expense reimbursement.

Step 1 : Record Tea + coffee + milk = £20. Put it on an Excel tab, date it and save it.
Step 2 : Photo the receipt and insert it as an image in the corner of the Excel tab.
Step 3 : Process a payment of £20 from the business bank account to your personal account with a reference of Tea.
Step 4 : At end of year, in your .csv download, there will be a line item for £20 referenced as Tea, which will then be a business expense that is tax deductible.

Are thete any other bookkeeping items that are troubling you?

I have been in business for 13-14 years. If it was a major problem I would have dealt with it sooner.
I was sort of hoping it would be a case of - yes £50 a year is fine its like petty cash OR no, you need to do x, y and z (as you have said).

In which case I doubt I will do that. I do my accounts at the end of the year so paying for something and hoping I took a photo/can find it is a bit of a faff.

 

[tony84]

Buy it from Amazon and you will get reminders. Then perhaps look through your whole business and see if there is anything else thats "falling through the cracks" all these little things add up and of course could be offsetting some tax liabilities

Not a bad shout to be fair. I might do that, I never thought about buying it off there.

I dont think there is anything else to be honest. My business is quite straight forward. oney out is mostly for IT/rent/bills etc. I rarely use the physical card.

 

[MyAccountantOnline]

....

If I start buying this through the business do I actually need to keep receipts?

I know it might be an odd question after 14 years, but everything I normally buy for the business is online so I always have receipts via email. I hate scraps of paper and I know if I take a photo when it comes to doing my accounts in 12 months time I will have no idea what the transaction is. Basically for the sake of about £15 in tax savings throughout the year, I CBA faffing about with receipts. Is it a major problem if there is about £60 throughout the year at supermarkets?

I probably know the answer which is why I have always just bought them myself.

Yes, you should keep receipts for all business expenses, and I do suggest you do so.

In practice for £60 a year I suspect HMRC would consider it immaterial – they may ask the question what the payments were for. If you had a strict Inspector, they could disallow a claim, and you’d end up paying tax and interest etc on the amount claimed.

I appreciate the point about not wanting to keep scraps of paper. Why not look at bookkeeping software with an app that lets you save a photo of a receipt. It takes a few seconds and gives you a proper record if HMRC ask.

Also, if you're currently doing the accounts once a year from CSV downloads, it might be worth looking at software generally. Spending less time each year pulling everything together would probably save you more than the tax relief on the tea and coffee.

 

[Chris Ashdown]

I used to put £50 in petty cash for small buys and once a month the accounts checked the box and listed the receipts Simples

 

[Paul Kelly ICHYB]

For the sake of a coupe of quid I am not overly bothered.

That's the attitude I used to have (for many years).

I then calculated that I was spending several hundred pounds a year on 'things' that I could/should put through the business, reimbursing me, increasing business costs and reducing corp tax (a very little bit)!

 

[tony84]

That's the attitude I used to have (for many years).

I then calculated that I was spending several hundred pounds a year on 'things' that I could/should put through the business, reimbursing me, increasing business costs and reducing corp tax (a very little bit)!

There is nothing bar tea/coffee I buy for the business. Maybe the odd bit of mileage I forget to note down, but everything is completely separate.

 

[tony84]

Yes, you should keep receipts for all business expenses, and I do suggest you do so.

In practice for £60 a year I suspect HMRC would consider it immaterial – they may ask the question what the payments were for. If you had a strict Inspector, they could disallow a claim, and you’d end up paying tax and interest etc on the amount claimed.

I appreciate the point about not wanting to keep scraps of paper. Why not look at bookkeeping software with an app that lets you save a photo of a receipt. It takes a few seconds and gives you a proper record if HMRC ask.

Also, if you're currently doing the accounts once a year from CSV downloads, it might be worth looking at software generally. Spending less time each year pulling everything together would probably save you more than the tax relief on the tea and coffee.

The software would cost more than the tax relief I could claim on 2-3 boxes of tea bags and coffee throughout the year.

But to be completely honest, I have to go through my statements anyway for the FCA. Our CRM does it also but the 2 never tally up completely due to how mortgage commission is paid and displayed (we get less than the paperwork says). I have to work out how much is mortgage income, how much is insurance, how much is regulated, unregulated, how much is from first charges and second charges etc. At the same time as doing that, if I see a transaction to Amazon for example, I check what it was (if I do not already know) and and change it to laptop, furniture etc.

Accounting software would only make my life harder and cost me for the privilege.

 

[MyAccountantOnline]

I wonder if perhaps your view of accounting software is based on older software rather than what's available now? There are quite a few free options now that can save a lot of time, not just on recording small purchases like tea and coffee.

You could also set up income categories so income is analysed automatically as it comes in, rather than having to do it all at year end.

Incidently I have no desire to market software to anyone – I just hate seeing business owners spend unnecessary time on bookkeeping and pay more tax than they need to.

 

[numbersrule]

I used to put £50 in petty cash for small buys and once a month the accounts checked the box and listed the receipts Simples

Hi Chris
When you say 'the accounts' checked the box once a month, that sounds like a business with an in house bookkeeping & accounting team. I agree, that is simples if that is the case!

 

[WaveJumper]

I wonder if perhaps your view of accounting software is based on older software rather than what's available now? There are quite a few free options now that can save a lot of time, not just on recording small purchases like tea and coffee.

You could also set up income categories so income is analysed automatically as it comes in, rather than having to do it all at year end.

Incidently I have no desire to market software to anyone – I just hate seeing business owners spend unnecessary time on bookkeeping and pay more tax than they need to.

Make you right on this going back some years we used excel spread sheets to monitor my sons company and produce his accounts until he grew and switched to Xero. Probably the best thing he did. I would recommend anyone to take a look at whats on offer out there now, they are user friendly (the accountant loves it) and linked with AI he reckons it saves employing a book keeper.

Back to the thread - anything that saves paying our government more than you need to in my book has to be done even if its a few extra quid a year better in your pocket than theirs.

 

[JEREMY HAWKE]

Have you lot just spent 48 hours discussing the tax allowance on a tea bag?
We can see the businesses on here who have been working with HS2

 

[tony84]

Have you lot just spent 48 hours discussing the tax allowance on a tea bag?
We can see the businesses on here who have been working with HS2

The world runs on tea.
If you do not start a project the right way, its doomed to failure.

Wait til we get to the bacon butties! Thats 2-3 weeks were never going to get back.

 

[Chris Ashdown]

Have you lot just spent 48 hours discussing the tax allowance on a tea bag?
We can see the businesses on here who have been working with HS2

A cup of tea costs little, but the quiet time taken making and drinking gives you time to relax and consider things, after all think what the tea Ceremony did to Japan's high speed trains (a world wide leader). never knock the humble cup of tea