When it comes to expenses and claiming them back, there are a lot of things to be considered.
As you’ll know, there are various rules set out by the HMRC around what you can claim, how to claim it, and how to store your records once you’ve claimed.
The last rule, storing expenses, can often catch people out – people claim and then the receipts go into the bin. However, did you know that by chucking your receipts out it could land you in hot water with the taxman?
How long do you have to keep expense receipts?
6 years. Yes, you have to keep the receipts for 72 whole months after processing. If you are self-employed (sole trader) then you’ll have to keep them for just 5 years.
What’s the best way to store records?
HMRC recommend you keep all the original documents you receive. This does not mean you have to keep them on paper. Most records can be scanned and kept electronically on a computer or a storage device such as a CD, memory stick or hard drive.
One way of minimising the amount of paperwork you have to admin process is by taking a fuel card. Fuel cards help take away the pain of going through and processing receipts. Once you have opened an account with Allstar you can use our online portal to store all of your fuel invoices. There is no need for paper, nor do you have to go through these receipts and take out any unwanted expenses like snacks and drinks. These HMRC-compliant invoices will only show fuel. If you use an accountant, a fuel card will save them time – they can claim back VAT for you without sifting through a box of receipts – helping you to save money too.
For all other expenses you may want to consider downloading an app to back up your receipts. Google Drive allows you to scan and store your receipts for free. You can use the built-in scanning feature on your phone or laptop to turn paper documents into PDF scans. These are then automatically saved and backed up safely. Receipt Bank is another expense recording solution you may want to consider. This uses clever technology to extract pertinent data from your paperwork and returns it in a suitable format, or feeds it straight into your accounting software. However, this type of software isn’t free – a basic Receipt Bank package will cost you £9 per month, per device.
Managing your fuel expense as part of your fuel card account alongside one of the above solutions for other expenses means that you and your business will be HRMC-compliant. Gone are the days when you had to keep boxes and boxes of receipts – you can now have it all online.
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