My accountant doesn't ask me 4 any bus receipts

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I am a new director of Ltd company and charge 20% vat on my monthly invoices and send receipts of my travel and lunches and stationery to my accountant but she says she doesn't need. I don't understand as fellow colleagues working as sole traders with Ltd company who charge vat tell me they offset vat returns with business travel and all business expenses.  My registered business address is my home but I travel to offices in town every day of my client.        ( long term employer ) so can i claim back on travel and food etc ?    My current accountant I found online ans based In India. Should I change and go with more traditional UK accountant.   Just need some advice from the pros if u don't mind gents.  At the moment I keep all receipts but she keeps telling me not to send to her as I don't fall in the bracket for vat returns .  FYI, I have a monthly invoice to client/employer for £6250.00 and then add 20%vat on every month.   Any advice would be greatly appreciated 

Thanks 

Zee

Replies (23)

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RLI
By lionofludesch
04th Apr 2022 23:06

Look - apologies if this is a daft question but I feel we ought to check.

Are you registered for VAT?

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Replying to lionofludesch:
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By DKB-Sheffield
04th Apr 2022 23:24

lionofludesch wrote:

Look - apologies if this is a daft question but I feel we ought to check.

Are you registered for VAT?

... or a 'sole trader working through a limited company'?
... or a limited company with a long term employer?
...or...

Whatever the answers, the answer to the original question(?)

"You can give your accountant your 'bus receipts' but, you can't claim VAT on 'bus fares'!"

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Replying to DKB-Sheffield:
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By Design Consultant
04th Apr 2022 23:58

Business receipts i meant not bus . Typed short hand . Apologies. I meant fuel fir car or train etc as visit site every day etc . Other colleagues of mine claim there travel and more Inc clothing ie suits and new laptops etc . Atm I'm claiming nothing

So just confused

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Replying to lionofludesch:
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By Design Consultant
04th Apr 2022 23:47

Yes vat registered ofc. Just don't understand the whole vat return game . I am a design consultant that has Ltd company set up and me director but just me ie no employees ask work for one company but not on paye so invoice monthly. Other colleagues of mine on similar professional contracts tell me they send every receipt to there accountant. Mine said no so hence my question . Apologies if I'm sounding stupid but just don't understand the whole vat return game

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Replying to lionofludesch:
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By Mr_awol
05th Apr 2022 09:22

lionofludesch wrote:

Look - apologies if this is a daft question but I feel we ought to check.

Are you registered for VAT?

Not daft, and certainly would help answer the initial point but not necessarily all that important in the grand scheme of things.

The follow-up question might be SHOULD the OP be registered for VAT (whether they are or not being less important, as a voluntary registration may be beneficial etc)

Not, i imagine, the type of questions that might be raised by a cheap outsourced sausage factory focussed on basic compliance and quick turnaround

Edit: I hadnt seen the OP has answered they are VAT reg. That might teach me not to jump in with a reply before reading the subsequent posts - although TBF it's 50/50 whether this type of Q gets any follow up from the OP once the questions start flying and they realise they arent going to get a free yes/no answer

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By Paul Crowley
05th Apr 2022 00:19

This is clearly just so wrong
Have you yet paid over any of the vat than you have charged to HMRC?
If not then you have problems that your inexpensive foreign person just does not know about.

But would I be correct in thinking the fees are really really inexpensive

Do your invoices that charge VAT have YOUR VAT number on them?
Whose idea was it to charge VAT?

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Replying to Paul Crowley:
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By lionofludesch
05th Apr 2022 04:23

Paul Crowley wrote:

This is clearly just so wrong

Hang on - another question before we start making judgments.

Are you on the Flat Rate Scheme or traditional Input/Output VAT ?

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Replying to lionofludesch:
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By Paul Crowley
05th Apr 2022 09:30

" At the moment I keep all receipts but she keeps telling me not to send to her as
I don't fall in the bracket for vat returns .
FYI, I have a monthly invoice to client/employer for £6250.00 and then add 20%vat on every month. "

Sounds like an inconsistency on thoughts about VAT
OP - yes registered and wants to claim input VAT
bookkeeper - ignoring VAT registration as turnover not reached £85,000 yet

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By David Ex
05th Apr 2022 00:45

Design Consultant wrote:

Should I change and go with more traditional UK accountant.   

I think that’s pretty obvious. In what world was engaging an accountant thousands of miles away in a foreign country a good idea? Being a company director is a serious business, with numerous legal obligations, and should be dealt with as such.

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Replying to David Ex:
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By Mr_awol
05th Apr 2022 09:20

To be fair, there are a number of 'traditional uk firms' who would just farm it out to India anyway.......

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By DKB-Sheffield
05th Apr 2022 00:53

I apologise for my earlier flippancy but, there are serious issues that you need to consider. Not least... your employer is not your client, nor are you a sole trader. However, I'll forgive you the musunderstanding of many a freelancer.

YES! You need an accountant who understands UK VAT, UK taxes and UK accounting frameworks and regulations. This will rarely be found by engaging an overseas accountant. I wouldn't engage an overseas accountant and I (like to think I) have a bit of knowledge of what is right and wrong. I'm afraid you seem to know very little and are therefore at risk of serious error.

If you contract with an overseas accountant, you don't know what their knowledge or capabilities are. I, for example, have no knowledge of the Indian tax system - which is why I don't have clients in India. Furthermore, when things go wrong (which I'd be very certain - they will), I doubt very much you'd be covered by any level of insurance!

As Paul has asked, have you - or your overseas accountant - filed a VAT return? Have you paid VAT? If 'no' to either of these, you need immediate help!

Once you have found an accountant, I then advise you ignore what your colleagues and mates are telling you! Some of the things they are suggesting you claim for are questionable (at the least). Clothing/ suits, travel to a fixed place of work, food at work... you may be surprised at how little they should be claiming!

Incidentally, you refer to not being 'on PAYE', that you employer is long-term, and that you work for one employer alone. Without reading too much into this, are you within OPW rules (also referred to as 'in' or 'caught by' IR35)? If so, you need an accountant to ensure you are operating this correctly - both personally, and as the company!

Finally... and this is more as a question to the floor... the accountant in India... are there any MLR issues?

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By Tax Dragon
05th Apr 2022 06:29

Does your accountant do your company's accounts and tax forms as well as the VAT returns? She might want those receipts after all if you mean that the company is buying your fuel, bus and train tickets, clothes and food for you. Does it own the car you drive? How does it pay you? (You and the company are different taxpayers and the company bank account is not your bank account. Oh, wait, please tell me the company has a bank account.)

It's all very well going along with your client and helping them avoid their employer obligations to you and associated responsibilities to the country, but it does mean (as has been said) that you take on a much bigger burden yourself. And you might not make the tax, VAT and NIC savings that your client promised you you would.

(Yes folks, I've joined in the Aweb guessing games this morning. You read the OP though, right?)

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Replying to Tax Dragon:
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By lionofludesch
05th Apr 2022 07:35

Tax Dragon wrote:

(Yes folks, I've joined in the Aweb guessing games this morning. You read the OP though, right?)

I read the bit that says "working as sole trader with limited company."

That was my next question.

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By SXGuy
05th Apr 2022 07:26

Well clearly you liked the idea of paying someone thousands of miles away peanuts to be your accountant and now you're surprised when they don't act in the manner that someone who was paid more might.

That's what happens when you cut corners. Lesson learned.

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RLI
By lionofludesch
05th Apr 2022 08:09

It's one thing to have Indians doing your bookkeeping but quite another for tgem to deal with your tax and corporate obligations.

Bookkeeping is pretty much universal and hasn't significantly changed since the fifteenth century. Tax varies from country to country, not to mention from year to year.

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Replying to lionofludesch:
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By Crouchy
05th Apr 2022 15:02

Cowboys and Indians, two types of firm that won't fulfil your tax requirements!!

I'm sure a quick google search will find plenty of local accountants with glowing reviews who'll be happy to put the OP on the right path

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By mrme89
05th Apr 2022 08:13

There's potentially IR35 issues too.

You have an 'accountant' that you don't trust to undertake the work competently (otherwise you wouldn't be asking the question).

Dip your hand in your pocket and pay for an accountant based in the UK that knows what they are doing and you can easily reach.

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By lesley.barnes
05th Apr 2022 09:38

I'm not a "gent" but here's my take on this anyway for what it's worth. There are a lot of unknowns in this question and I would suggest that the poster makes an appointment with a UK accountant as soon as possible. Most offer a short first meeting for free. I'm not suggesting the present accountant isn't up to it (we don't know what she has been asked to do) but because I don't think the poster fully understands what he is doing or any pitfalls.

Is this flat rate VAT so the receipts arn't required for the VAT? Have any VAT returns been submitted to HMRC? Who owns what in this company - Company car or mileage? Commute to only one place of work? Long term single employer or multiple clients - IR35? Sole trader/limited company, colleagues claiming for suits? No PAYE set up?

It is just a random collection of statements at the moment without someone digging into this its impossible to give advice over a forum.

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By Duggimon
05th Apr 2022 09:58

I would strongly advise finding a UK accountant you can go and see, bringing every bit of official paperwork you have and get them to set you on the right path. The amount you earn is substantial enough that you could be setting yourself up for some very expensive issues in the near future.

edit: I say UK accountant because I assume you are in the UK, what I ought to have said is local. Your issues are not something you can resolve by asking questions on here.

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By I'msorryIhaven'taclue
05th Apr 2022 15:20

Complete the following sentence: Pay peanuts, get ..............

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Replying to I'msorryIhaven'taclue:
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By Tax Dragon
05th Apr 2022 15:37

.....and responses here are free!

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Replying to I'msorryIhaven'taclue:
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By DKB-Sheffield
05th Apr 2022 16:08

...Snoopy?!

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Replying to I'msorryIhaven'taclue:
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By I'msorryIhaven'taclue
05th Apr 2022 17:16

Time's up!

The correct answer was of course "....Indians"

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