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Corporation tax and missing receipts

Hello,

I have a new client who I am completing their corporation tax return, unfortunately they have moved premise and lost a number of their receipts. I do not think that this was done purposely just a mistake. They have been able to supply me with complete bank statements which I can use.

As they are VAT registered I am having difficulty reconciling the bank statements and VAT returns. Can anyone advise me on how I can complete the CT return (excluding VAT) by using the bank statements and VAT return (which does not include receipts).

I have told them the importance of record keeping and I do not think that this will happen again.

Thank you in advance

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What accountancy system are they using. Surely you can base the accounts on that

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Aren't you going to prepare accounts first?

If you only have net vat payments, treat the net vat paid as an expense (or debit sales ) as you might with the flat rate scheme.

or, if you have the total inputs without the detail make a reasonble apportionment based on known bank payments.

 

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VAT records

Presumably the written (or computer) records for VAT haven't been destroyed like I guess the bills/receipts have.

Therefore, assuming that the VAT records are invoice-date based, there is a sales figure readily obtainable from the VAT records.

Then turning to the expenses, all VAT records that I have seen in recent years have a supplier name alongside the monetary values.

The names should identify the nature of the expense, assuming that a co-operative client is the case.

So an invoice-based set of accounts could be drawn up leaving the issue of bank balancing.

If lists of debtors / creditors could be constructed at start and end of the year then some form of purchase / sales controls could be constructed.   

It's all very involved, time-consuming, but an interesting challenge as I see it.

Lots of time = lots of fee.

Get paid up front.

Client education is next.  The receipts were either deliberately destroyed or lost accidentally.  Why were no proper (analysed) accounts records maintained?  Can the client be converted to an acceptable on, ie one who will keep proper records from now onwards?

Had proper records been kept then missing receipts would NOT be serious.

Maybe the client had one of those bookkeepers who is incapable of anything except maintaining daybooks - I've come a cross a few too many of these over the years (they can't understand cash accounting, cash balancing or cashbooks and bank balancing).

 

 

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Yes I think that it is going to be time consuming but a very good challenge! I have converted the client to an accounting system and they no longer use their old book keeper so I am confident that this will not happen again.

Thank you for all of your very valuable comments.

 

 

 

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Nostalgia

Sounds like the typical accountancy job when I was training in the 1970's!

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