Lost all accounting paperwork

[bkkheat]

Hi,

We have been in business for about 8 months, gave all the documents to a freelance accountant to do it for us to be ready for the audit.

She has just told us she has lost it, apparently she left it in the taxi........

We now only have the summary of what happen each month, yes probably should of taken a copy of everything before we handed it over.

So what can we do now? Will there be any penalty? We havnt really made anything and still running at a loss as most companies do in the first year.

We still have all the invoices we send out and but most of the things we paid we dont have anything of.

[blackcab]

Basically it's up to her to get your tax and VAT correctly sorted and your accounts audited.

That shouldn't be a big problem.

[bkkheat]

Yes i know, but she has lost everything and we are planning to get someone else.

Can we just say we lost the accounting? lol

Will we get fined if we just say that? It is not as if we have done a lot of work, mostly just expenses

[Satcommlee]

Don't mean to be alarmist.. but I think you will be negotiating a fine with the Revenue Department - who are very active at the moment especially if you try and claim anything back from them.

Is there a large cash element to your business? Any reasons for the revenue department to suspect you are lying about losing the paperwork.

Is your accountant any good? Maybe she was in over her head or totally screwed up and is not being truthful.

Should she perhaps get a police report?

[blackcab]

The thing is it's extremely unlikely anybody from the Revenue is going to inspect anything if you don't claim a refund. Especially for a new business.

If most of what you have lost and cannot replace is expenditure then your taxable income is going to be higher than it should be. If you are going to be under the tax threshold anyway it's not a massive deal.

Speak with your new accountants about this.

Have you submitted your half yearly accounts yet? It's that time of year.

[Jonathon]

Documents can go missing anytime so you need to have a backup strategy in place, even if they are just hard copies.

[fletchsmile]

A decent accountant should be able to sort you out. Qualified accountants in UK for example learn how to deal with "incomplete records" as part of their training and exams. Training and qualifications in Thailand isn't as rigorous as UK, but there are some good qualified accountants and firms here too.

A few general points

- Reconstructing your accounting is one aspect. Your bank statements will be a key source of that as they will have all payments and receipts that are settled. get copies from your bank if your accountant also lost these. After that what you've left is the unsettled entries for invoices not paid / received etc. Presumably you have "books of prime entry" for these or sales/ purchase ledgers

- Dealing with the tax aspect is another matter, and probably more important in some ways. But if you reconstruct your accounts and identify missing balances first you've a good starting point. Be mindful of all the tax docs and different types (eg VAT, WHT, taxable income/expenses), plus whether the docs are generated by you or by someone else eg supplier.

For example:

>generated by you - sales (tax) invoices, PND1, PND 3 (WHT), VAT submissions etc you can reproduce from your own accounting records whatever you have, whether ledgers, bank statements etc.

> generated by others - you can request copies from suppliers/ people you've bought off. You need a genuine document eg purchase invoice for input VAT as well as it to be a deductible expense. Where you don't have the document assess how much they are which will guide you as to next step. You could just list them as no allowable expenses in your take returns such as for income tax, or just not claim the input tax for VAT.

Just make sure you aren't claiming VAT, WHT or company tax deductions for stuff you don't have supporting docs for. Better to not claim the tax deduction.

Any decent accountant should be able to sort if for you, but it may take time and cost you for their services. Also make sure you keep up to date with filings of all other returns so don't incur late penalties

Cheers

Fletch

Edited August 14, 2015 by fletchsmile

[yankee99]

I thought your supposed to file everything monthly so how is it possible for 8 months of paperwork to be gone?

[khunPer]

OP, we used to have a weekly column from an accountant/auditor in our local newspaper, and I cut that article out almost every time, as they had useful information. One week she wrote “When financial papers get damaged”.

Maybe her information can help you; I quote from her article:

The first step is to go to the police station and notify them that your accounting documents has been lost or destroyed. Secure a copy of notice from the police as proof to the Revenue Department and the Ministry of Commence. What could be troublesome to you is the process on handling your tax cases when you inform them that you don’t have any accounting documents left to refer to?

The following are procedures on how to process your tax in cases where your financial documents gets destroyed by fire or flood or other causes, as per Revenue Department procedure:...

(sic.)

An accountant should know the procedures, otherwise I can scan the newspaper clip and PM to you – or publish here, if allowed and other may have interest.

[Maestro]

...I can scan the newspaper clip and PM to you or publish here, if allowed and other may have interest.

If it is not from the Bangkok Post or Phuket Wan, please scan it and post it here. It is useful information that may be of interest to many readers.

Thank you!

[khunPer]

...I can scan the newspaper clip and PM to you or publish here, if allowed and other may have interest.

If it is not from the Bangkok Post or Phuket Wan, please scan it and post it here. It is useful information that may be of interest to many readers.

Thank you!

From a closed local newspaper, named "Samui eXpress", issue May 28th to June 10th, 2010...

(Edit: seems like the file get reduced in size, when uploaded, hope it's readable)

(Edit2: I uploaded to my own server and inserted the image here, seems to work better).

Edited August 14, 2015 by khunPer

[Maestro]

Thank you, khunPer. The attachment is easily readable on my tablet and I am sure also on other devices.