Random invoice question/advice needed

[TheMunk]

Ok this is probably a question for an accountant but I thought I'd throw it out here first.

I've recently set myself up as a sole trader so I'm quite new to the buisness side of things. I've got a builder/friend who's been giving me quite a bit of work which is good but he doesn't want me to invoice him and just wants to pay me cash. Now for some people that would be great but I'm planning on getting a mortgage in the next few years so i want to be showing as much income as possible and keep thing legit. How can I get round the fact that he doesn't want me to say where I'm getting the money from? I want to be declaring all my income and I'm assuming I need to show where the money is coming from with invoices?


I understand his reasons for doin it the way he is which is up to him and I can't afford to stop working for him as he is giving me a lot of work and pays well and on time but I need to be declaring the money I'm earning?????

how can I get round this problem? Do I need to be able to prove where the money is coming from eg there company name and address on an invoice?

 

[Octopus]

An interesting conumdrum!

You could put it through your books as invoiced business to him but not give him the invoices.

To be honest not sure what your options are BUT sure as eggs are eggs, getting a mortgage nowadays is difficult enough and as a sole trader you'll need 3 years of accounts and they won't take 100% of your income either!

 

[Richard Burns]

Prepare a "copy" invoice for your records note down that it was paid in cash in your accounts.
All your accounts are OK, if someone else is messing around at their end it is nothing to do with your accounts.
If I get a customer who does not want an invoice I just prepare the invoice and file it.

 

[telectrix]

agree^^^

 

[imago]

TBH getting paid in cash for work as a sole trader the least of your worries is a mortgage. If HMRC catch wind of it they will ream you, no ifs or buts. If they audit your books/accounts, and sole traders are high on the list of 'interest' they will want to know where every penny came from. If you can't/won't/don't tell them they will assume that you've not declared a multiple for that amount and tax you based on that.

As part of an audit they will look at your spending (credit cards, loyalty cards, discount cards, personal and business accounts, trade accounts etc etc) if there's more going out than you can provide paperwork for coming in you'll get a huge 'estimated' tax bill. If you can't or won't pay it's straight to jail without passing go. To qoute my accountant "I'd rather rip off the Mafia than HMRC."

As already advised, make up the invoices and keep your paperwork up to date.

 

[dcelectrical]

i had a similar thing in a previous life, when times were good. i had a word with the developer in question who happily gave me a name and address to put on the invoices guess it was his parent company.

 

[oldtimer]

Totally agree with Imago remember there is an audit trail a guy rears ago was complaining about his £900 tax bill so I said what you have declared that you earned £9000 last year he just about fell at my feet and said how did you know I said well double £900 multiply by 4 add your tax code on it and you better hope you dont get audited by HMRC because your spending £16k to £18k a year.

So remember there is an audit trail and if you aint got one then they will estimate you earned £50k and that 50-10 diived by 4 and you owe them £10k plus penalties

 

[Spazz]

Put all work as cash sale. That way you declear your income with no record of where or who it came from.

HMRC don't care where it comes from as long as you declaring it.

Think of a shop they don't know who they sell a bottle of milk to and they don't care nor do HMRC

 

[Octopus]

Plus if you are in England or Wales and you're doing Part P stuff there's going to be a paper trail back to you anyway