The Wholesale Forums

[Ems1]

It's not that he won't supply one at all,it's just that i didnt know whether a paypal one is good enough,let me refer to my earlier post:

I don't really send detailed info when I ship international other than
package contents and declared value for the customs. If you need anything
special requested I can try to accommodate."

Do you think a basic invoice of package contents and declared customs value along with the paypal invoice would be sufficient?,if not i will ask him to give me a more detailed one but i'm not sure EXACTLY what should be on an invoice could you guys help me out with that and maybe list the info i will require so i can ask him for it?Any help would be greatly appreciated.Thanks

[greedyboy]

As long as he supplies a Commercial Invoice on the box (not a courier docket) with the goods with all the contents and prices etc and it is signed on behalf of his company, then that is all good

[Ems1]

Greedyboy,do you think that he is reffering to a comercial invoice when he says:

.....other than
package contents and declared value for the customs

???????

[anotheruser]

Pete from the USA has got it right for this country, too. Anyone with a computer or typewriter can knock up genuine-looking headed paper and an invoice. As the authorities are aware of that it is, in itself, proof of nothing.

Any kind of statement, receipt or invoice, including a Paypal one, even a handwritten one, is good. It is even better backed up by an Inland Revenue or VAT trusted source. Banks and credit card companies are trusted sources as far as they are concerned - no, guys, what we think is another matter for another debate .

Proof of cash movements reflecting the amounts invoiced and, roughly, dates of payment is adequate evidence. Your bank or credit card statement provides that.

It may be that you will never get an inspection by the authorities, but it would be foolish to throw away bank and credit card statements which show business transactions, even if you do have invoices and all the other paperwork.

[Ems1]

So what you are saying anotheruser is that the authorities would be happy with bank details to prove transactions if i did not get a detailed invoice?

[greedyboy]

Originally Posted by anotheruser

Pete from the USA has got it right for this country, too. Anyone with a computer or typewriter can knock up genuine-looking headed paper and an invoice. As the authorities are aware of that it is, in itself, proof of nothing.

Any kind of statement, receipt or invoice, including a Paypal one, even a handwritten one, is good. It is even better backed up by an Inland Revenue or VAT trusted source. Banks and credit card companies are trusted sources as far as they are concerned - no, guys, what we think is another matter for another debate .

Proof of cash movements reflecting the amounts invoiced and, roughly, dates of payment is adequate evidence. Your bank or credit card statement provides that.

It may be that you will never get an inspection by the authorities, but it would be foolish to throw away bank and credit card statements which show business transactions, even if you do have invoices and all the other paperwork.

Believe me I have had many VAT inspections and I'd recommend anyone alway get a hard copy of every transaction.

First and foremost you need a paper trail of invoices. A simple calculation and then reconcile of you bank account is enough. If there is ant discrepancies then they will go through your bank statements etc.

They will also pull out random statements/transaction and then try to find the corresponding paper invoice.

So just saying 'oh look Mr nice Tax Man here is a statement and I paid Ivor Biggen £426.97 for some adult toys', will technically be correct but the nice man will ask for the documented transactions as well.

It is true anyone can make up an invoice. If I supply you a receipt saying you paid my fake company £500 then you are almost in the clear. I am the one who has committed the fraudulent paperwork (unless you are involved in the fraud).

So in summary, get paper invoices... always.

[anotheruser]

Ems1 - not quite. The paperwork must have at least some detail the authorities can cross-reference by. If you paid 500 smackers, you have to be able to show it's for stocks or stuff for your business, not a new washing machine for the other half or cash for a night on the tiles.

Greedyboy, I'm not disagreeing. I just think you may be overstating it. This bit:

First and foremost you need a paper trail of invoices. A simple calculation and then reconcile of you bank account is enough.

is sufficient, although it should read "is then enough" at the end. You're right, the first bit must be true, too.

Anyone getting lots of VAT inspections when they have nothing to hide is possibly subject to over-zealousness by inspectors. Think about joining an organisation like the FSB, who have the muscle to put experts in at a tax or VAT inspection and warn them off when they're overdoing it. Their legal advice line has helped me out on many occasions and I expect it will do so again. But I confess the authorities have never bothered to inspect my books. Yet.

Aaahhh just seen why people are misunderstanding what I said - should have been adequate supporting evidence in the third paragraph. I inadvertently implied statements would be enough on their own. Apologies all round, folks.

[greedyboy]

Originally Posted by anotheruser

Ems1 - not quite. The paperwork must have at least some detail the authorities can cross-reference by. If you paid 500 smackers, you have to be able to show it's for stocks or stuff for your business, not a new washing machine for the other half or cash for a night on the tiles.

Greedyboy, I'm not disagreeing. I just think you may be overstating it. This bit: is sufficient, although it should read "is then enough" at the end. You're right, the first bit must be true, too.

Anyone getting lots of VAT inspections when they have nothing to hide is possibly subject to over-zealousness by inspectors. Think about joining an organisation like the FSB, who have the muscle to put experts in at a tax or VAT inspection and warn them off when they're overdoing it. Their legal advice line has helped me out on many occasions and I expect it will do so again. But I confess the authorities have never bothered to inspect my books. Yet.

I understand what you are saying 100% and agree 100%.

Having been VAT registered since 1990 based the laws of average I would have had 5.1 inspections.

However depending on your line of business/products and your turnover that can be dramatically increased or decreased.

I was in the contract mobile phone industry (not SIM free) for 12 years (I sold it in 2003 with an non return clause so no stock requests please) with a 7 figure turnover. Therefore my business was classed as a high risk to the VAT man (late 90's early 2000's) despite never committing a single fraud.

I would enjoy both announced and unannounced inspections (men with badges knocking on your door!). Some of my friends who dealt in large volumes of SIM free stock) would have ongoing 6 monthly inspections.

I am a member of the FSB but more importantly I use an accountant which is a partnership of over 200 accounting specialists who I can call on for advice. It's not cheap but you get what you pay for.

[Pete]

I do believe the industry or type of products and sales methods have a lot to do with how often, if ever you are visited. While we have no VAT, we do have individual state sales taxes in most states.

I opened my first business in 1961 and have been visited by the sales tax auditors twice in the intervening years. Both times as a result of them finding invoices from me to someone else they were auditiong. It seems they just keep following the paperwork from one to another.

In my cases, it was because I did not charge sales tax to the customers. In the first case, I had the proper exemption certificate on file, so that was that. The "nice tax person" was quite nice and that was that. Never a real audit.

The second time I was hit for some unpaid taxes. Most of my years I had been selling auto parts to retail installers and in that business there is no tax on their labor, just on the parts installed. So, when I started building and selling point-of-sale computer systems I operated the same way. Turns out I should have been collecting taxes on the invoice total, not just the parts.

Same with service contracts, the whole amount was taxable. So, I paid the taxes and billed my customers for the taxes I had failed to collect. About 80% paid. The ones who did not never received another bit of help or advice, free or paid for.

Siof my business was out of state, where no taxes were required, it ended up actually costing me under $ 200, which was not a big deal, since I was selling systems in the several thousands and up range.

Regardless, if you've got a document that shows what you received (in any form) that can be tied to a specific payment, you should have no problems. Naturally, a proper invoice (if you are on "open account", or receipt (if you pay prior to or when receiving the goods) with line item pricing is best. But even the most hard-hearted tax person must understand that you cannot hold a guin to the seller's head and force them to supply a detailed invoice when they are in another country entirely. Just write a list of the items and quantities and move on.

[anotheruser]

Ah, mobile phones, greedyboy. Now I understand. They really did have a reason. VAT Customs & Excise lost millions in a scam which, I believe, they've now shut down even though some may still be trying it on.

What happened was a "trader" (i.e. scammer) would "import" a container load of mobile phones, imaginary ones, of course, but then disappear without paying the VAT. So the authorities knew these phones had a theoretical presence. Then another trader would sell a large batch of mobiles overseas and claim the VAT back. And got paid. And another would do the same thing, until the whole amount had been accounted for. And the VAT reclaimed for. They worked it a few times, so I'm given to understand, so literally millions was paid out to crooks.

I'm not sure of the detail, but that's the gist of it. So now, anyone with a VAT account which fluctuates, and their business has anything to do with electronics, gets a closer than usual look-over by them.