Negative Sales Invoice for labour ??

[Dave2302 387]

I don't get much warrantys in the workshop against a job we have done. Well haven't had any in the last couple years, but had a PITA yesterday, a Transit, fitted 2 new batteries 12/12/2017, one died, vehicle non starter stuck up a mountain at the Guys house.

So I attended in the Van, got the Van started, checked charging OK, removed the 2 batteries, tested them, one good one dead. Tested both circuits for a current draw, none found.

So, dead battery, new one sent FOC from Factors this morning, and went back and fitted it, customer over the moon happy .........................

So here's the rub, that battery is FOC, but what about the 2 hours spent, call out yesterday / checking then leave site, and subsequent trip back to fit the battery this morning ?

Do I invoice myself for 2 hours and put it through the books, or do I do another sales invoice and enter it as a negative amount in sales, or will HMRC just tell me to fuck off  ???????????????

Anyone else with a workshop know how to do this, I have tried ringing useless cunt accountant but he's most likely in the pub now

TIA Dave

[Stalker 180]

The bill should go to the Factors/manufacturer of the battery surely?

[Dave2302 387]

If it were an 8.9 hr Pug Clutch fit I would surely be discussing it with them, but we have a good relationship, and I'm not sure these days don't most only warrant the parts not labour ?

Tbh I'm not really bothered, but if it's allowed I would rather offset it in the bookwork, it's £££'s I'm not giving up to tax that way ......................

I remember reading about this somewhere, may have been on this forum ??

The customer offered to pay my time, but I don't see why he should, he paid me last year to fit 2 new batteries etc 

[justlooking 48]

from a non educated workshop point of view you’d hope they’d be willing to help with the book fitting time for a tranny battery? 0.2hrs most cars so maybe it’s more on a PITA vehicle like a Transit

[Dave2302 387]

No, It is 2 Batteries under Drivers Seat, I guess around 0.3 hrs, but that doesn't cover driving 22 miles each way 4 times, and also checking charging and checking for drain, testing Batteries etc !!

This guy is a very good customer, he is stranded without his Vehicle, and at the end of the day it was exactly as he thought, a dud Oldham 3 yr warranty battery supplied 11 months ago ........................

The 2 hours of my time is immaterial, but all I want to know is can I put it through my books by invoicing myself for 2 hours I lost if so I won't be paying tax on that bit of money in December 2019.

If I can't fine I'll just write it off.  If I could have gotten hold of the Accountant he would have said yay or nay, another garage mates wife, who does their book work reckons there is no reason why not, and they have been trading 30 years in Dunvegan.

[Nick M.K. 574]

3 minutes ago, Dave2302 said:

The 2 hours of my time is immaterial, but all I want to know is can I put it through my books by invoicing myself for 2 hours I lost if so I won't be paying tax on that bit of money in December 2019.

Which bit of money? The replacement battery was free. You can certainly claim the 88 business miles (around 54 pence per, have to doublecheck).

You buy a "Guildhall mileage log book", record these miles there and deduct the £50 or so as expenses.

https://www.ebay.co.uk/itm/Guildhall-Vehicle-Business-Mileage-Record-Log-Book-Ref-T43/150747245295?_trkparms=aid%3D555017%26algo%3DPL.CASSINI%26ao%3D1%26asc%3D55149%26meid%3D4e86ae68ea664a78867872be1be6b549%26pid%3D101006%26rk%3D1%26rkt%3D1%26%26itm%3D150747245295&_trksid=p2045573.c101006.m3226

[justina3 518]

So if you charge yourself to your business then you would need to declare that income on your tax return and in turn pay tax on it, so i would see it you (MAY) get away with it in one hand and thats a big may but will have to give it away in another, and i kind of think a HMRC inspector would raise an eye brow or two and start digging to see what else you have tried to create.

 

3 minutes ago, Nick M.K. said:

Which bit of money? The replacement battery was free. You can certainly claim the 88 business miles (around 54 pence per, have to doublecheck).

You buy a "Guildhall mileage log book", record these miles there and deduct the £50 or so as expenses.

https://www.ebay.co.uk/itm/Guildhall-Vehicle-Business-Mileage-Record-Log-Book-Ref-T43/150747245295?_trkparms=aid%3D555017%26algo%3DPL.CASSINI%26ao%3D1%26asc%3D55149%26meid%3D4e86ae68ea664a78867872be1be6b549%26pid%3D101006%26rk%3D1%26rkt%3D1%26%26itm%3D150747245295&_trksid=p2045573.c101006.m3226

I read what op asked as not so much the mileage which is a given but the hours lost as a direct cost to his business. 

or its late in the afternoon and i need food. 

 

[Nick M.K. 574]

If I go to BCA on a buying spree and don't buy anything:

1) I can still expense the 76 miles there and back  BUT

2) I certainly can't issue myself (or anyone) an invoice for 6-7 hours of my time. 

In the specific example here Dave either charges the battery supplier / maker or is out of pocket. Except the miles 

[Arfur Dealy 823]

Take it on the chin, Billy will appreciate your help

[have a word with the wife 299]

8 minutes ago, Arfur Dealy said:

Take it on the chin, Billy will appreciate your help

exactly ! it will be more than made up for in recommendations, repeat business etc and the fuels deductable 

[David Ayers 171]

I think Dave isn’t worried about the charging the customer. He just wants to be tax efficient.

[Screenman 47]

Surely if you write out an invoice then it needs paying, whoever gets that money will be taxed on it, or am I reading it all wrong.

[metcars 394]

I thought all you guys that live out in the sticks were all friendly and just did each other favours? 

[BHM 994]

1 hour ago, met said:

I thought all you guys that live out in the sticks were all friendly and just did each other favours? 

I’d assumed it would of been a cash-in-hand job.

Anyway, the fact Dave has done a home visit was his choice, not the factors problem - his customer was responsible for getting the vehicle to him.

As for arguing over the labour time for a quick diagnosis & to change it. Really?

[trade vet 697]

15 hours ago, Nick M.K. said:

If I go to BCA on a buying spree and don't buy anything:

1) I can still expense the 76 miles there and back  BUT

2) I certainly can't issue myself (or anyone) an invoice for 6-7 hours of my time. 

In the specific example here Dave either charges the battery supplier / maker or is out of pocket. Except the miles 

If you run a ltd company and your personal car belongs to and is maintained and  paid for by you,you can charge the company for your business mileage.However as Justin says that could be just the excuse HMRC need to start an enquiry ( they go on for years).

[Dave2302 387]

16 hours ago, Nick M.K. said:

Which bit of money?

I am not Limited, did that years ago, never again !!

I am a busy small business Sole Trader, who pays his tax and NI.

I lost 2 hours @60 per hr = £120 surely this is a legitimate business expense, I know I can claim mileage, fact is at the moment I am that busy that those 2 hours could have been sold over and over.

I know it was years and years ago, but the bookkeeper we had for the Gearbox Firm used to offset non productive workshop hours on a faulty part but I don't know how, that is what I am asking here, "can I claim a loss of hours" if so how.

If I had fitted whatever wrong, and had to do 2 hours extra work then of course I would not expect to claim it.

Of course I'm not that bothered about 2 hrs, ces't la vie, first time there has been a problem involving more than half hour in almost 3 years, but it got me thinking .................

Say it was that Clutch and DMF I fitted last week that shat itself, that is a 9 hr Job, (well 8.9 book time), leave this with me, I will get the Accountant out of the Pub  and get a definitive answer and report back.

 

[mike101 8]

The only way I could see it working is if you had a separate limited company that you could invoice - even then it would be pretty pointless unless you were trying to redistribute profits.

Im no accountant but if you could reduce your tax liability by creating an expense for your own time then everyone would be at it!  

It’s one to write off as a cost of doing business I’m afraid. 

[Trident 24]

Not sure if i am missing something here, but regardless of whether your a sole trader or ltd, you sell cars for a living, and take a nett profit, this is your salary divide it by your annual hours worked = hourly pay, but you don't consider you get an hourly wage because it is made up of the sale of the vehicles, so, you are already being paid for your time, if you charge it again, you will be being paid in effect twice.  You can definately bill the factors for the 'call out' ie two hours labour, had the part not failed you wouldn't have had to go, it's a warranty claim to them and you can charge out to yourself the mileage...but i don't think hmrc would like this and could end up scrutinizing books...

[whitestone679231 113]

dont try to complicate matters with HMRC because they will jump on you and no matter how good your books are they will fcuk u one way or the other, either bill factors, bill billy or take it on the chin. keep away from HMRC,s radar.

[justina3 518]

2 hours ago, Dave2302 said:

I am not Limited, did that years ago, never again !!

I am a busy small business Sole Trader, who pays his tax and NI.

I lost 2 hours @60 per hr = £120 surely this is a legitimate business expense, I know I can claim mileage, fact is at the moment I am that busy that those 2 hours could have been sold over and over.

I know it was years and years ago, but the bookkeeper we had for the Gearbox Firm used to offset non productive workshop hours on a faulty part but I don't know how, that is what I am asking here, "can I claim a loss of hours" if so how.

If I had fitted whatever wrong, and had to do 2 hours extra work then of course I would not expect to claim it.

Of course I'm not that bothered about 2 hrs, ces't la vie, first time there has been a problem involving more than half hour in almost 3 years, but it got me thinking .................

Say it was that Clutch and DMF I fitted last week that shat itself, that is a 9 hr Job, (well 8.9 book time), leave this with me, I will get the Accountant out of the Pub  and get a definitive answer and report back.

 

So on your line of thinking can i charge my company 1.5 hours lost time due to the complete idiot i had to deal with who couldnt understand that the brakes on a 107 valued at £2000 do not feel the same as his brand spanking new X5 company car.

Accountant may give you an answer but that is far from set in stone HMRC love to argue with accountants which is where the investigation polices popped up a few years back, i may be cynical but by HMRC running up your accountants time and effort they often get what they want as the accountant / client would be better off making a deal and paying what ever is asked rather than run up an investigation bill which could go on for years.

 

[Nick M.K. 574]

2 hours ago, Dave2302 said:

I lost 2 hours @60 per hr = £120 surely this is a legitimate business expense

Absolutely not. 

This is a lost profit opportunity and the only people that should reimburse you are the parts factors or makers of the faulty battery IF the battery warranty is for the part and labour which I doubt. 

[Dave2302 387]

Nick, that's the whole point, nobody warrants labour these days, they supply you a new part yes, but why should the Workshop takings foot the bill.

I almost had to go legal on Ivor Searle Engines a few years back, when a Rebuilt CDI motor they supplied pissed oil out of the Rear Main Seal before it even came off the lift !!

So I then had to pull the trans out of the Merc and fit a new MB Seal to it !!

They Coughed up in the end, well actually it was their agent who I bought it from that paid me, I don't know if they ever got paid 

1 hour ago, justina3 said:

So on your line of thinking can i charge my company 1.5 hours lost time due to the complete idiot i had to deal with who couldnt understand that the brakes on a 107 valued at £2000 do not feel the same as his brand spanking new X5 company car.

Accountant may give you an answer but that is far from set in stone HMRC love to argue with accountants which is where the investigation polices popped up a few years back, i may be cynical but by HMRC running up your accountants time and effort they often get what they want as the accountant / client would be better off making a deal and paying what ever is asked rather than run up an investigation bill which could go on for years.

 

How does it take 1.5 hours to say "Fuck off you know nothing cunt" !!

[trade vet 697]

3 hours ago, mike101 said:

The only way I could see it working is if you had a separate limited company that you could invoice - even then it would be pretty pointless unless you were trying to redistribute profits.

Im no accountant but if you could reduce your tax liability by creating an expense for your own time then everyone would be at it!  

It’s one to write off as a cost of doing business I’m afraid. 

Would it not be possible ( if you were that way inclined) to raise an invoice for the labour but then not send it to your customer.It then eventually becomes a bad debt which can be written off. Risk reward wise,I wouldn’t bother.

It must be interesting how Dave accounts for his work when he says he sometimes gets paid in local produce.How does HMRC treat that,there must be some special dispensation for highland inhabitants.

[metcars 394]

1 hour ago, trade vet said:

It must be interesting how Dave accounts for his work when he says he sometimes gets paid in local produce.

Moonshine

[Dave2302 387]

I think a lot of you are missing the point, or I am just plain awful at describing exactly what I mean ??

One or 2 of you have come close..................

Firstly it is not a vehicle I sold, it is a Workshop Customer and I had it in 11 months ago after it was recovered off a local mountain for non start, I diagnosed it, and fitted 2 new Batteries 12 / 12 / 2017 which have a 3 year warranty. Mr P the Customer is a Mountain Rescue Guy, his vehicle has to be 200% reliable.

One has failed, I spent 2 hours Workshop time travelling, and thoroughly diagnosing, (due to the use and importance of the vehicle), and then replacing a faulty part I supplied. I cannot Invoice the Customer, he has already paid me 11 months ago.

I cannot Invoice the Factor, only the part is guaranteed. 

Yes it is exactly like an unpaid Invoice, and yes there is, (or was a few years ago, maybe it has changed since I ran the Gearbox business in England), a procedure for this I just do not know how to do it as I never got involved in the Bookwork back then, and being a limited and VAT registered company with PAYE Employees it was a lot more complicated then.

The answer is below :-

I either:-

1)    Make out a sales Invoice for 2 hours, and put it in Sales Invoices with a Red MINUS £120 total, so at the end of the month my Sales Total is less £120 (less likely)

OR

2)    I Invoice the Workshop for £120 total with it's own Workshop Invoice, and put it in my Miscellaneous Purchase Invoices (more likely)

OR

3)    HMRC have changed the rules and this can no longer be done (dunno have to wait and  see what the egg head says when they finally get him out of the Boswell Hotel Bar) 

My last conversation with Account he clearly stated that as long as I could justify any Purchase amount if questioned by HMRC then it was no problem.

I was just hoping someone else who has a workshop knew how to do this or could definitively say "No Dave it was axed by HMRC in xxxx year" 

21 hours ago, David Ayers said:

I think Dave isn’t worried about the charging the customer. He just wants to be tax efficient.

Yes exactly

I just thought of this ...................

What I could have done is paid someone else 2 hours labour to go, test, return and fit Battery, now I know I could certainly put their invoice in as a Purchase, so that is most likely how it is done, it goes in "MISCELLANEOUS PURCHASES"