cash takings don't balance to till Z reads

cash takings don't balance to till Z reads

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Hi

If a coffee shop has Z reads from its till showing circa £20000 but the physical cash, credit cards add up to circa £19000. do you still have to pay the full vat on £20000.

It's impossible to tell if the £1000 is theft or user error on the till - highly likely to be user error as it is a new till - does the circumstances affect the VAT payment?

thanks

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By occca
12th Jan 2012 15:07

Has it not been reconciled?

Has the client not reconciled the amount in the till to the z reading every day?

I think you need to try and establish how the error occurred

Can you scan through the tills for all transactions and see if there is an unusual amount keyed in in error?

In the absence of any of this I would base it on the till readings

 

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By andy.partridge
12th Jan 2012 16:49

Zero rated?

In my experience, HMRC will want to rely on the Z readings unless it can be demonstrated how and where the Z readings are in error. As mentioned above, a daily reconciliation is a must.

Two areas that might help you:

1. It could be quite normal for a coffee shop to have some zero rated sales. You mentioned 'full VAT' so I don't know if this has been considered or relevant to your query.

2. In my early days with a particular coffee shop client, he would pay the staff from the till and occasionally forget to document the fact. Could this account for your shortage? ie. the Z readings are pretty much correct but some costs haven't been accounted for correctly

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By Zara Accountancy
13th Jan 2012 21:23

As the default would be to take the Z reads, I think you need to work with the cafe owner to set up a daily reconciliation process. This should then identify user errors that were being made and perhaps allow you to quantify the extent to which they may have affected the variance to date.

 

Best Wishes

www.ZaraAccountancy.com

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By hairyfingers
16th Jan 2012 09:38

daily reconciliations done

Hi

 

thanks for your responses.

 

Daily reconciliations are done by doing 'X' reads on the till.  then the 'Z' read is done monthly.  Some days the till has been out by a few pence others it is out by a few hundred.  On the daily rec sheet there is a place where he enters expenses paid for out of the till.  All things are covered on the sheet that could affect money coming in and out of the till.  which leaves me with either operator error or theft.

 

Having looked through each day in detail I can see, for instance, on one day there was a clear operator error of £300 which was a deposit taken for a Christmas booking that was rung through the till once as a cheque but was also rung through again as the person paid by credit card so it ended up going through twice.

 

The coffee shop owner, when asked, remembered the situation and it all seems to add up that this was operator error not fraud.

 

so in this case am I able to adjust the takings accordingly, as even though it all seems fine to do this ultimately all I have to go on is the owners word.

 

is it just a case of keeping records of what happened in case of any questions from HMRC and hopefully they would believe it?

 

thanks

p.s Re the zero rated VAT comment this isn't affected - there are a few zero rated sales for cold takeaways but 99% are catering 20% supplies. 

 

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