We had this situation where the amount paid 'on account' was far more than the value of work carried out to date. In addition the work carried out was terrible. We wrote on behalf of the client but got nowhere. We then assisted the client with a County Court claim. The other Accountant's Insurance Company then got involved & settled with a 4 figure sum payment. I think any court would consider if the amount paid was a reasonable amount for the actual work carried out.
Whilst HMRC will consider your client's supply as VAT inclusive, will your client's customer have a valid VAT Invoice to be able to claim the VAT back? If not then his/her cost will remain the same. Hopefully your client can do a nice back-dated vat claim to ease the pain. Every cloud....?
A trainee was compiling Accounts for a sole trader who used to supply Bank Statements with notes written beside each transaction. He came to me & asked what the client did. I replied that he was a motor mechanic. The trainee then asked 'so why does he buy so many Drawings'.
I would also make sure there are other people/directors/shareholders involved in the Company.
Everything mentioned above re keeping things separate is ok until the client gets greedy! Trust me it will usually happen!
Excel Spreadsheet:
Col 1 list Year & Month
Col 2 list sales value for the month
After you have done 12 months: Col 3 SUM the 12 figures in col 2 to give 12 month total
Copy/Drag the formula down to give a rolling 12 month total
Col 4 use the formula: £84999 minus figure to the left (12 month total) plus 1st month sales figure of that 12 month total. This gives the maximum sales you can invoice next month.
My answers
We had this situation where the amount paid 'on account' was far more than the value of work carried out to date. In addition the work carried out was terrible. We wrote on behalf of the client but got nowhere. We then assisted the client with a County Court claim. The other Accountant's Insurance Company then got involved & settled with a 4 figure sum payment. I think any court would consider if the amount paid was a reasonable amount for the actual work carried out.
Mr X bought the item, then 'sold' it to the business the following year for the same amount. No problem, unless VAT is involved of course.
Whilst HMRC will consider your client's supply as VAT inclusive, will your client's customer have a valid VAT Invoice to be able to claim the VAT back? If not then his/her cost will remain the same. Hopefully your client can do a nice back-dated vat claim to ease the pain. Every cloud....?
Is this the sole contribution during her employment? If yes what would be the average per year over her employment? That may make it more palatable.
Operate via a different First Name & tell anyone who asks that the director is the father.
A trainee was compiling Accounts for a sole trader who used to supply Bank Statements with notes written beside each transaction. He came to me & asked what the client did. I replied that he was a motor mechanic. The trainee then asked 'so why does he buy so many Drawings'.
I would also make sure there are other people/directors/shareholders involved in the Company.
Everything mentioned above re keeping things separate is ok until the client gets greedy! Trust me it will usually happen!
If he had used a figure divisible by 52 & 12, that would have been really clever!
Excel Spreadsheet:
Col 1 list Year & Month
Col 2 list sales value for the month
After you have done 12 months: Col 3 SUM the 12 figures in col 2 to give 12 month total
Copy/Drag the formula down to give a rolling 12 month total
Col 4 use the formula: £84999 minus figure to the left (12 month total) plus 1st month sales figure of that 12 month total. This gives the maximum sales you can invoice next month.
The client who eventually pays invoices that are more than 12 months overdue but still deducts the prompt payment discount!