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
Replies (4)
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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
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
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