Do you (have to) back earned cash?

[largelunchbox]

I’m not talking about avoiding tax. The scenario would be receiving cash from a job then issuing a invoice and putting said invoice thro the books thus declaring the earned cash. Then just keeping the cash on hip rather than banking it for convenience. Any one know if this is a problem?

[KevinCamaroSS]

Provided the invoice is shown as paid then there should not be an issue if you are a sole trader/partnership. You would show the value as received and also the same amount as drawings.

[ghost83]

That^

Or it would be there in petty cash

As long as u can prove where it’s gone it’s ok

[ElectricPics]

largelunchbox said:

I’m not talking about avoiding tax. The scenario would be receiving cash from a job then issuing a invoice and putting said invoice thro the books thus declaring the earned cash. Then just keeping the cash on hip rather than banking it for convenience. Any one know if this is a problem?

I do it all the time but I make an entry on my accounts so my books balance.

[Dave Hedgehog]

or just do what 'my mate' does, bank the cash in a safe at home, never allow it to have an electronic trace and spend on it stuff that has no physical asset to show for it, like holidays, restaurants, track days

[clockworks]

Many of my customers pay cash. I pay some into the bank to cover direct debits and credit card purchases, some I keep for cash purchases like fuel and food shopping.

As long as it goes through the books, makes no difference. No point queuing up to pay it in, then drawing it out again at the end of the week.

Might be different if you are talking about big sums I guess, where an audit trail could be handy to avoid suspicion of money laundering

[Fastpedeller]

Dave Hedgehog said:

or just do what 'my mate' does, bank the cash in a safe at home, never allow it to have an electronic trace and spend on it stuff that has no physical asset to show for it, like holidays, restaurants, track days

Not to be recommended. Would you play tennis against a Wimbledon pro and win? Take on HMRC at your peril. Foolish plan, as HMRC have seen every trick in the book and know what businesses are likely to be taking.

[Zetec-S]

Dave Hedgehog said:

or just do what 'my mate' does, bank the cash in a safe at home, never allow it to have an electronic trace and spend on it stuff that has no physical asset to show for it, like holidays, restaurants, track days

so, where does your ‘mate’ live?

[98elise]

ElectricPics said:

largelunchbox said:

I’m not talking about avoiding tax. The scenario would be receiving cash from a job then issuing a invoice and putting said invoice thro the books thus declaring the earned cash. Then just keeping the cash on hip rather than banking it for convenience. Any one know if this is a problem?

I do it all the time but I make an entry on my accounts so my books balance.

Agreed, I've done a few things where I've just had to record the transaction, but not physically do it. As an example I have a director's loan which I'm converting to a dividend. My accountant tells me I don't need to pay the loan back, then withdraw it as a dividend. I just need to make the right entry in my books and complete the dividend paperwork.

It makes sense as physically moving the money adds nothing.

[RRLover]

Fastpedeller said:

Not to be recommended. Would you play tennis against a Wimbledon pro and win? Take on HMRC at your peril. Foolish plan, as HMRC have seen every trick in the book and know what businesses are likely to be taking.

They are very much poacher turned gamekeeper.
Its got to be done right

[largelunchbox]

Dave Hedgehog said:

or just do what 'my mate' does, bank the cash in a safe at home, never allow it to have an electronic trace and spend on it stuff that has no physical asset to show for it, like holidays, restaurants, track days

Thx but I’m not askin ways too avoid tax.

[largelunchbox]

KevinCamaroSS said:

Provided the invoice is shown as paid then there should not be an issue if you are a sole trader/partnership. You would show the value as received and also the same amount as drawings.

Thx, just wanted too make sure this was legit

[Eric Mc]

Cash transactions are still perfectly legal. So far, the UK government has not passed any sort of legislation making it not legal.

Obviously, the law says you still need to account for cash transactions properly.