Up until a couple of weeks ago this might have sounded like a rather silly question, the great British pound bearing Her Majesty’s face is still the legal tender of the realm isn’t it?
But no longer such a silly question as politicians have only been ‘thinking’ again and have ‘opinions’ about cash.
The proverbial wrong tree that they are barking up is often barked up at by HM Revenue & Customs and to some degree banks (can you credit it) who dislike cash for other reasons.
We seemed to have moved to an automatic assumption that the possession and use of cash is wrong and in someway suggests shady and underhand practices including the avoidance of tax, money laundering or a raft of criminal activities.
This is nonsense!
We are all entitled to receive and pay cash but there are a number of steps to work through to ensure you are not caught up in the nonsense, none of which relate specifically to cash but are driven by good record keeping.
- If you are receiving regular small amounts of cash (such as a shop, pub, café, etc) make sure you have a good till system in place that helps to accurately record your takings each day.
- If you are receiving irregular or large amounts of cash, bank these amounts intact at the earliest opportunity.
- Where you are paying cash expenses regularly, ensure you have a receipt to support the payment (as you are required to do, just the same, for bank payments).
- Where you are paying an individual for services, ensure you have a receipt or invoice to support the payment. If they are unwilling to provide you with one, then ensure you have their name & address to record the details.
- Where you are paying employees in cash, have the employees sign each time they collect wages to ensure there is a complete record.
And be warned, asking if the VAT can be ‘forgotten’ about for cash, is a common way HM Revenue & Customs get tipped off about rogue traders. So stay well away from this.
If you are not sure if you are recording or accounting for cash correctly then please contact us on 01302 752700 and we’d be delighted to take you through it.