Missing receipts for business expenses: what can you do?

Missing receipts for business expenses are common. You may have paid for something on a company card, lost the receipt and only noticed months later when you came to do the accounts.

That doesn’t necessarily mean you can’t claim the expense. But you do need enough evidence to show what you bought and that it was for the business.

Here’s what to do.

Do you need a receipt for every business expense?

You need proper records to support your accounts and tax returns.

For sole traders, HMRC says you should keep records of business expenses and proof such as receipts, bank statements and sales invoices.

Limited companies also need to keep accounting records. These include records of money spent by the company and supporting documents such as receipts, orders, delivery notes and bank statements.

If one receipt is missing, the first job is to find other evidence of the purchase.

What can you use instead of a missing receipt?

Start with the obvious places.

You may be able to get a duplicate invoice from the supplier, download another copy from an online account or find the original order confirmation in your email.

Your bank or credit card statement may also help. HMRC recommends asking suppliers for copies of invoices or banks for replacement statements if records have been lost or destroyed.

A bank statement isn’t always enough on its own. It may show that you paid £200 to a supplier, but not what you bought.

If you have other evidence as well, such as an email, booking confirmation or delivery note, keep it with the transaction.

Can you claim an expense without a receipt?

Sometimes, yes.

The important point is that the expense must still be genuine and allowable.

For a sole trader, the cost must meet HMRC’s rules for allowable business expenses. For a limited company, you still need enough information to prepare accurate accounts and the Company Tax Return.

So don’t simply guess what a payment was for.

If you can identify the transaction and explain it, give your accountant the evidence you do have.

For example, if a hotel receipt is missing, you may still have the card payment, booking confirmation and diary entry for the meeting you attended.

That gives a much clearer picture than the bank transaction alone.

What if several receipts are missing?

This is where the problem can become more serious.

If you have a lot of unexplained payments, work through the bank and credit card statements one by one.

Try to match each transaction to an invoice, receipt, email or other record. Make a note of anything you still can’t identify.

It is much easier to deal with missing information before the accounts are due than at the last minute.

If you are approaching your year end, our guide to year-end accounts preparation explains what your accountant is likely to need.

What if you can’t replace the missing records?

Sometimes you won’t be able to recover everything.

HMRC says you should try to recreate lost or destroyed records.

For Self Assessment, you may sometimes need to use provisional or estimated figures.

A provisional figure is one you expect to replace later when you have the correct information. An estimated figure is used when you do not expect to recover the original figure.

If you run a limited company and records have been lost, stolen or destroyed, HMRC says you should do your best to recreate them and tell your Corporation Tax office if they cannot be replaced.

If you are in this position, speak to your accountant before you file the return.

How long should you keep business receipts?

For limited companies, HMRC generally requires accounting records to be kept for six years from the end of the financial year they relate to.

VAT records are also generally kept for six years.

In practice, the easiest approach is to keep digital copies as you go.

If your accounting software lets you photograph or upload receipts, use it. It is much easier than trying to reconstruct a purchase a year later.

What should you do if your records are incomplete?

Tell your accountant.

They can help you work out what is missing, what can be replaced and whether you have enough evidence to support the figures in your accounts.

If poor record-keeping is becoming a regular problem, THP’s bookkeeping service can help keep your records up to date throughout the year. We can also take care of your annual accounts.

So.  if you have discovered missing receipts for business expenses – or other incomplete records – get in touch with a member of our team. We can help you sort out what is recoverable and what needs further work.