Buying in cash, asking for receipt.

cormie

Hi,
I tend to buy a lot of things in cash that are for business use, whether it be mechanic, or parts from a scrapyard or gumtree private seller etc. Now my accountant has said that I should try and get a receipt for everything. I'm still not sure about this, but is there any reason why somebody wouldn't want to give a receipt? I mean if I'm told a price for something and I'm happy to go with that, and then when I go to pay I ask for a receipt, is it bad form? Obviously some sellers or service people won't want to be declaring extra work or income and that's not my business at all and I don't want to be forming bad relations with anyone after initially being happy with their price, I just need a receipt to show where money in my account went though and that's all I'm after. I know people sometimes can give prices "cash" so is it right or wrong to assume that a receipt can be provided without any bother to them even when I pay cash?

Take for example a pair of headlamps I had to buy for NCT, from an opel dealer with a VAT receipt I'd probably be looking at about 200eur, from a scrapyard I was quoted 100eur, but I got them in the end for 50eur cash, no VAT, from a classified listing on gumtree. So in a case like this, is it frowned upon to ask for a receipt? I really don't know so any feedback would be appreciated

stephendevlin

Accountant needs to see where your money is going .... (papertrail) if audited he would have answers to questions regarding where money was spent. Proof of Purchase would be required. Its ok me putting 100 smackers in my pocket an telling him I bought stuff with it.

cormie

Thanks for the reply, yep he was saying that to me alright so I'm just wondering is a receipt something I should mention before agreeing a price for something in cash or would the recipient of the cash payment be fine with me mentioning I need a receipt when I go to pay the agreed price? Is there any reason for them to get upset or unwilling to give a receipt? All I need is the papertrail as you said.

Also, what details would they need to put on the receipt?

Would say "2 headlamps for 50eur cash, Signed skfsajkljasdkf" be ok? the skfsahfdsjkafsd is a signature nobody can read just to give an example?

drunkmonkey

Are you Vat registered?

cormie

I am myself yup, does that make a difference?

stephendevlin

You need to have a reciept thats all or if they have a system (most do) where they can put the name of your company / business.

You can claim the vat back on your purchases

cormie

Thanks for the input, I'm not sure what who you mean when you say most will have a system where they can put the name of the business into? Who would that be?

I keep all vat receipts and do my own spreadsheets keeping track of it all, it's just with cash sales like mentioned above I'm not too sure of the etiquette

stephendevlin

cormie wrote: »

Thanks for the input, I'm not sure what who you mean when you say most will have a system where they can put the name of the business into? Who would that be?

Some people just print reciepts (like small shops etc) other businesses print invoices (where they can print your business name to the Invoice/Reciept)

cormie

Yeah that's all fine with regards to receipts from shops and that, but this is more about cash sales from people who are unlikely to be declaring the transaction at all. I always ask for VAT receipts with my fuel purchases and anything else from an established business but not sure of the etiquette with such a request from examples I mentioned above.

stephendevlin

cormie wrote: »

Yeah that's all fine with regards to receipts from shops and that, but this is more about cash sales from people who are unlikely to be declaring the transaction at all. I always ask for VAT receipts with my fuel purchases and anything else from an established business but not sure of the etiquette with such a request from examples I mentioned above.

If you are audited this will not show favourably.

How can you explain 100's of euros being spent and no proof of Purchase...

cormie

So that's why I'd be looking to get receipts off such purchases, but I'm just asking what's the etiquette in such a scenario where I've agreed to a price, much cheaper than say a main dealer and then ask for a receipt. Is it bad form to ask for a receipt after a cash sale price has been agreed?

aidan.connolly

Hi

I think it is very reasonable to expect to get a receipt even if it is a cash sale. If you are been charged vat and can recover it, you will need it to recover the vat.

Regards

Aidan

cormie

Yes definitely if there is VAT charged I'll get a receipt. I've hundreds of receipts from laser sales, or cash sales where say a service provider may not have had facilities to process a laser card transaction but still provided a VAT receipt, these are all fine and accounted for. There could however be a very small number of purchases which I may have simply taken the money from an ATM, paid the seller who I may have found on the likes of gumtree and got no receipt from what I bought from them even though it's for business use.

So I'm just wondering is it ok to ask for a receipt in such a scenario or is there any reason why they may prefer not to write me a receipt?

Basically just wondering for whatever reasons they may have themselves, which may be no business to me, is there any reason they'd scuff at the request for a receipt?

Again, I'm not talking about an established business cash sale, but say going to somebodies house who may be breaking a car and I buy a set of headlamps off them and need to show where the 50euro went.

bluenose1956

Two things to consider here (but there may be more, and your accountant can surely advise):

One, you can only reclaim VAT where the goods/services are relevant to your business, and you have a receipt containing the providers own VAT number.

Two, if you can't account for the money spent then you are liable to pay income tax on it as the Revenue will view it as drawings.

cormie

Thanks bluenose, yup, that's what my accountant said to me anyway.

I'm really just looking to find out whether there are any implications on the payee on giving me a receipt or any reason they would prefer not to?

bluenose1956

The only implication for your supplier is borne out of his honesty in his own accounts.

In theory you could be purchasing from someone who does not run a business, but could give you a page out of a duplicate book saying "Supplied to Cormie one set of headlights... for the sum of €...."

Thus there is no proper paper trail, but the revenue would likely ask you questions if there were too many such instances.

But a legitimate business should be prepared to give you a receipt if you pay cash for goods. The declaration of their income is for them to undertake.

I'm guessing it is unlikely the Revenue would pursue a supplier as a result of your expenditure unless they had prior suspicions about said supplier.

cormie

Thanks for the reply.

The theory you mentioned would be reality in a lot of cases, say for example somebody may have a regular job, or be on social welfare, whatever they may be doing themselves, and they just happen to have a car that went bust on them and are selling parts, such as the headlamps, which I then buy as it's a much better deal than buying new, but I want a receipt. Is it reasonable to ask for one from such a person in such an instance?

Said supplier may not even have accounts, in most cases they won't even be a supplier, just somebody selling something I happen to need for my business.

Why would revenue ask me questions if there were many such instances though? Incase they thought I was making them up or something? Again I should be able to trail it all back (NCT form saying headlamps failed, cash receipt saying headlamps supplied, NCT form stating healamps passed) for example.

So there'd be no real reason for somebody to be hesitant on giving a receipt in such a situation then and it wouldn't be bad form for me to ask for one after having already agreed a price?

bluenose1956

As you say, you could be writing the receipts out yourself.

I probably never answered your original question about the etiquette of asking for a receipt; but I suppose there is no harm in asking, and if they are happy to provide a receipt you can make it legitimate to some extent by asking them to include their name and telephone number.

The unreadable signature may not be the best approach.

cormie

Thanks again for the feedback. I guess it depends on how they want to write it, unless there are guidelines that should be followed, such as a full name and phone (mobile ok?) number. Now, if they DO provide such a receipt with these details, are they leaving themselves open to inspection (very unlikely I know) of Mr. Revenue asking why they didn't put that 50 quid through their books, or say 200 quid if it was a nixer from a mechanic for example.

bluenose1956

What you have to remember is that if you knowingly pay cash to avoid a tax liability you too are breaking the law.

The simple way to conduct a business is with honesty, then you won't be wondering who's knocking on your door.

I'm sure your accountant has spelt this out to you.

If you purchase from a business expect to receive a receipt whatever means you pay by.

If you buy from Joe public ask for a receipt or write out your own petty cash slip.

cormie

I haven't a clue about tax liability so wouldn't know how to avoid it either and don't intend on doing so at all I just can't justify spending 200 euro on something when I can get it from Joe Public for 50 quid

Now the petty cash thing is something I'm not up to date on either. Would this be seen as petty cash and would a petty cash slip replace the need for a receipt from such payees?

TheCostumeShop.ie: Ronan

Revenue like to pick an industry and clamp down on them. I'd imagine (and this is just speculation), they audit someone and follow the trail. If you have a load of cash receipts from one person they might call upon him to make sure his books match yours. If they don't they then work out where the cash all came from. For example if you pay him 1000 quid and he lodges it but doesn't have any sales reports then it would imply he is the dodgy side of the deal. Likewise if they dont lodge it but have a lifestyle beyond what their recognized income states.

Generally revenue folks are smart and have seen every trick in the book. So keep yourself squeeky clean and keep track of all cash in and out.

bluenose1956

Think back to your OP, you mentioned the scrapyard, that's a business, they should give you a receipt if you ask for one.

The mechanic doing a nixer, is he employed by a garage or does he own a garage? If he works for a garage, your cash is going to the black economy - against the law. If he owns the garage and you pay him cash, you avoid paying VAT - against the law; and he does not declare that income - against the law.

Buying from Joe public for cash would generally (but may not always) be within the law.

cormie

Thanks again for the replies.

I didn't actually buy the headlamps from the scrapyard, but from Joe Public so not so easy to know whether or not to ask for a receipt. From the scrap yard I would have of course.

Regarding the mechanic, I was just using an example, the mechanic I have paid in cash is a registered, legitimate business who simply doesn't have a laser terminal, he has given me vat inclusive receipts all the time. I was just using an example of maybe somebody else doing a nixer.

I think in future I'll just mention that I'll need a receipt before agreeing a price anyway.

Know nothing of this sorta thing, but would it not make sense for you to just keep your own records?

Make a spreadsheet. Don't ask for receipts, but keep contact information?

For example, keep a note of the date, the amount spent, the product/service bought, the sellers name, the sellers contact info.

I'm fairly sure it's legal for me to sell my possessions whenever and wherever I like. Otherwise eBay, Adverts etc, would never exist. With that in mind, I'm fairly sure Revenue won't care if I'm selling you my old headlamps, therefore, if they come asking me, I have no reason to lie to them (unless I'm claiming welfare and constantly stripping down cars and such, but that's a whole different scenario).


I would not bother to ask for a receipt off a private seller. Joe Soap doesn't have receipt books and such lying about the place, so I'd just make a note of the sellers name and contact number/address, stick it in a spreadsheet and surely that's every angle covered?

cormie

That sounds easy alright, I wouldn't be sure if it's enough myself though and not sure if it would be enough for revenue or satisfy accountant requirements in terms of a paper trail

Well as I say, I'm not the most knowledgeable on this sorta stuff, but it seem the only rational and realistic route to me.


If you contact Revenue they may be able to tell you if they have a preferred method for such, or if there's a standard for dealing with this kinda stuff? (though at the same time, you don't really want to put yourself on their radar unnecessarily).

cormie

Yeah, I'm not doing anything wrong though, just getting a better deal and in most cases it would even be worth having it seen as a personal expense and having to pay tax on it I guess but obviously would be best to have a valid receipt and prove it wasn't an ATM withdrawal for a night out or anything

torres123

the whole idea of a cash price is the supplier can do a better price because he or she is not putting it through the books, so when your asked for a receipt its very annoying and i wouldnt give you one.. if you want to claim the vat back, pay the proper price.. now if you walked into a shop and bought a item with no haggling and paid cash, yeah no problem id give receipt. the rule i would go by would be,all business purchase use a card or cheque and get your reciept and claim your vat back..

TheCostumeShop.ie: Ronan

torres123 wrote: »

the whole idea of a cash price is the supplier can do a better price because he or she is not putting it through the books, so when your asked for a receipt its very annoying and i wouldnt give you one.. if you want to claim the vat back, pay the proper price.. now if you walked into a shop and bought a item with no haggling and paid cash, yeah no problem id give receipt. the rule i would go by would be,all business purchase use a card or cheque and get your reciept and claim your vat back..

:rolleyes: I think your way off base here. The term cash price means that your getting cash upfront, nothing to do with breaking the law. Taking cards has a charge associated with processing it and a risk, likewise cheques bounce and take a while to clear.

You're legally obliged to pay VAT if registered and tax on your profits. If anyone refused to give me a receipt on the basis of wanting to screw the tax man I know who i'd be calling. I think that's really poor form that your on a forum like this boasting about how you dodge the rules of the game as others might try the same thing and end up with a holiday behind bars.

Kinetic^

If you're dealing with a business and you don't get a receipt, ask for one. They've quoted a price and you've paid money, you need to record the transaction. I provide a receipt to all of my own customers without being asked, can never be too careful in this regard.

If i was selling something personally on adverts and someone asked me for a receipt I'd probably tell them to gtfo tbh.

torres123

TheCostumeShop.ie: Ronan wrote: »

:rolleyes: I think your way off base here. The term cash price means that your getting cash upfront, nothing to do with breaking the law. Taking cards has a charge associated with processing it and a risk, likewise cheques bounce and take a while to clear.

You're legally obliged to pay VAT if registered and tax on your profits. If anyone refused to give me a receipt on the basis of wanting to screw the tax man I know who i'd be calling. I think that's really poor form that your on a forum like this boasting about how you dodge the rules of the game as others might try the same thing and end up with a holiday behind bars.

i didnt say i do or have done this, but whether you like it or not, this is what happens in the real world.. you have picked up somewhere that i was boasting, i missed that bit.. i think you have misunderstood the original question that the thread began with.

cormie

I find it quite interesting that Kinetic has thanked what the costume shop has said, but has then gone and said that if I asked him for a receipt on buying these headlamps, he'd tell me to GTFO

That's exactly what I'm trying to find out, if it will piss off the seller to be asked for a receipt on what is a great deal for me, but not a business sale for them. :cool:

TheCostumeShop.ie: Ronan

Sorry Torres if I miss-interpreted your posts meaning.

Cormie, I guess the answer is if someone is selling in a business capacity then you should always expect / request a receipt. If they happen to be selling off their wedding dress (using this as an example as people tend to only have one in their possession) then its unlikely they will have a receipt book on hand and as such its ok not to expect a receipt. Keep track of it anyway for revenue incase you get audited as an audit is painful if your books aren't squeaky clean.

cormie

Thanks for that, so although it's ok not to expect a receipt, is it bad form to ask I wonder? Like is there any reason why someone wouldn't want to give one?

Thoie

I've been in the situation where I've asked for the price of something, and the answer was "If you don't need a receipt, it'll be 50, if you need a receipt it's 75" (or whatever the figures were).

I think the easiest way to avoid the situation is to say "Hi, I'm calling from X Company and wondering can you give me a price for Z" - that will give most people the clue that you'll need a receipt. If you don't introduce the idea of it being for a company it might take some of our dodgier traders unpleasantly by surprise when you ask for one.

If you can't get a receipt for something (and it's your own company) you have to keep in the back of your mind the fact that whatever you're buying may have to be accounted for as drawings. So if you're getting something for 20 instead of 30, you might decide to take the hit, but if it's 2,000 instead of 3,000 for a genuine business expense in the long run it would make sense to go somewhere you know you'll get a receipt.

cormie

Yeah I think the best way to approach it in future is that if it's obviously for a business expense and this is clear to the payee, then I'll ask for a receipt, if not, I'll make sure I mention I need one prior to a price being agreed.

I still think on the likes of the headlamps, where they cost me €50, it would still work out better overall if I didn't get a receipt and they were seen as drawings... I think?