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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4717
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have just started a UK company offering business services.

Customer Question

Hi,
I have just started a UK company offering business services. I currently have one client (based in Budapest) who I will be working with full time for a period of six months at a fixed monthly management fee of Euro 2000 per/month. I will be travelling extensively during this period and anticipate reimbursable expenses to be circa Euro 6,000 per month. Is there a requirement to keep all receipts / invoices / proof of expense for HMRC purposes or will a simple spread-sheet of incurred costs be sufficient. Expenses will be reimbursed from the client on a monthly basis.
Thanks
Submitted: 6 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 6 months ago.

Thank you for your question..

There is a requirement to retain accounting records for tax purposes and also under Companies Act 2006.

I am providing you a link relating to keeping accounting records under the Companies Act 2006 provided by my accountancy body...see here

http://accainpractice.newsweaver.co.uk/accainpractice/oc1abzhqml9

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 6 months ago.
OK having looked at the link it does not really answer my question.
The level of expenses likely to be claimed are high. My understanding is that expenses such as travel, hotels, etc are non taxable and as I will be paying them on a personal basis, but being reimbursed via invoice to the company I am doing the consultancy work for, I am assuming that as long as I have a spreadsheet showing the date and amount of the expense then this should suffice.From the link... The requirements of Companies Act are only concerned with records needed by directors to prepare statutory accounts and represent only the minimum level of accounting records that a company must keep. "Expenses being claimed do not form a component to the profit and loss or financial position of the company and from the statement above require a minimum level of accounting.So, whilst it may be prudent to keep a copy of the incurred expense receipt/invoice etc, is it an accounting or reporting requirement or will a spread-sheet showing the accounting of the expense, (value, date incurred etc) be sufficient?Thanks
Expert:  taxadvisor.uk replied 6 months ago.

Thank you for your reply.

If any of the expenses incurred are going to be paid by the company with a view to be recharged to client at a later date, then you should keep the receipts/invoices as they are accounting records.

If these expenses are paid by you on a personal basis and are not going through the company records (your company) then the spreadsheet is a minimum requirement. My advice to you would be to retain the receipts in the event HMRC makes an enquiry and also wish to see your personal bank statements. A spreadsheet may suffice as far as your customer is concerned.

I hope this is helpful and answers your question.

Expert:  taxadvisor.uk replied 6 months ago.

Hi there

Just checking if you have further concerns on retention of accounting records.

Many thanks

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