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Post Info TOPIC: Director/invoicing question


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Director/invoicing question


My client runs an mot garage and has purchased parts for his vehicle through the company. He has then generated a sales invoice to his company  which is vatable, then paid the invoice via the  company bank account. I have never come across a director issuing a sales invoice to the company. Bank payment from company bank account to pay purchase invoice yes but not sales invoice.

Am i missing something here with regards to the sales invoice.



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Master Book-keeper

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Nikole wrote:

My client runs an mot garage and has purchased parts for his vehicle through the company. He has then generated a sales invoice to his company  which is vatable, then paid the invoice via the  company bank account. I have never come across a director issuing a sales invoice to the company. Bank payment from company bank account to pay purchase invoice yes but not sales invoice.

Am i missing something here with regards to the sales invoice.


The guy is clearly a moron! An invoice from the limited company to the same limited company.  He seriously thinks the company has sold the company the parts?   Hilarious.

So the parts must still be on company premises and not in his car!

Is the sales invoice in the same amount as the goods purchase invoice?     If so, on the sales invoice - cross out the company name (in red pen), add his and 'pay' it from his DLA, whilst slapping round the face with the amended invoice.  

I would say make sure he hasnt popped the cash in the petty cash tin, but some how I doubt it!

 

edited for clarity



-- Edited by Cheshire on Sunday 24th of September 2017 09:23:49 AM

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 Joanne 

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Nikole wrote:

He has then generated a sales invoice to his company  which is vatable, then paid the invoice via the  company bank account.


 How the bank must have laughed.  



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John 

 

 

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Hi Joanne

Director is a sole trader. Sales invoice is higher than purchase invoice and parts are now on his own car. No petty cash involved as he has used the company debit card to pay for the goods via the card machine. He has actually issued two invoices to the company and paid both with the company debit card. I asked him why he had generated the invoices and he told me that he had been advised to do it this way no



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Nikole wrote:

Director is a sole trader.


Oh no no no no no......



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Shaun

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Master Book-keeper

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Lol Shaun and John.

Can you confirm status of the business Nikole? Limited (=company) or sole trader.

Also, what did the muppet say when you told him that when he 'paid' the sales invoice using his business debit card, that the money went out of the business bank to then go back into the business?

He has charged his own business a profit margin! Oh boy this has given me such a giggle!

He hasn't been told to do this, he has misunderstood what he has been told! He isn't the sharpest tool is he.

Pop it to his DLA or drawings, depending on the type of entity! Never mind slapping him with the invoice, you need to use a whole exhaust!

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



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Hi Joanne

It Is a LTD company. 

I didnt offer any response to reason as I was a little gob smacked as to why they'd issued themselves invoices with profit and vat then paid with the company debit card. Surely it would be easier for them to refund the transaction and void/credit the invoice and put the purchase invoice through DLA.



-- Edited by Nikole on Sunday 24th of September 2017 09:58:27 PM

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Master Book-keeper

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So not a sole trader.

So has the purchase invoice been paid via the coming bank account?

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



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Purchase and sales have been paid for from the business bank account.

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Master Book-keeper

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Nikole wrote:

Hi Joanne

It Is a LTD company. 

I didnt offer any response to reason as I was a little gob smacked as to why they'd issued themselves invoices with profit and vat then paid with the company debit card. Surely it would be easier for them to refund the transaction and void/credit the invoice and put the purchase invoice through DLA.



-- Edited by Nikole on Sunday 24th of September 2017 09:58:27 PM


 

You cannot DLA a purchase invoice otherwise it will never actually be paid to the supplier. 

 

Edited  -  it appears non of it can be DLA'd anyway because it isnt a Limited company, per later posts.

 

 



-- Edited by Cheshire on Sunday 24th of September 2017 11:28:39 PM

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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Given your pre edited comment, are you completely at ease with the differences between director/sole trader status?

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



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Completely at ease. The reason I edited my comment is when I googled the company they are showing as LTD but they're not listed on companies house. They will eventually set up as a LTD company so totally my mistake/confusion.



-- Edited by Nikole on Sunday 24th of September 2017 10:32:36 PM

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Master Book-keeper

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Hi Nikole

So is it a sole trader then?  Why was it coming back as Ltd on Google if they aren't registered at Companies House?

And did your MLR checks not sufficiently identify the status of your client?

 



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Master Book-keeper

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Nikole wrote:

Completely at ease. The reason I edited my comment is when I googled the company they are showing as LTD but they're not listed on companies house. They will eventually set up as a LTD company so totally my mistake/confusion.



-- Edited by Nikole on Sunday 24th of September 2017 10:32:36 PM


Two issues - KYC for one.

The other - this guy really is treading a fine line by the sounds of it.  This could be construed as a dishonest misrepresentation under the Fraud Act. Penalties apply (fines, prison). Claiming to be limited when clearly not - could be seen as an attempt to defraud creditors.

no



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Senior Member

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Hi John,

Yes I completed all of my necessary checks for MLR purposes and everything was fine. I have been having a mooch on the net this morning and there is only one listing showing them as Ltd. Every other listing is non Ltd. They have recently switched providers for advertising their business so I think this is where the problem has arose. 



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