Background
We are a tax refund company. We send hard copy claims to the tax office which prove that our clients incur expenses and claim tax relief. One type of claim we submit in fairly high numbers is for motor mechanics who buy tools to do their job.
Current Process
Currently we have a manual process to convert the purchase evidence in the form of hard copy receipts and statements into a format accepted by the tax office.
This involves a number of steps:
– Prep: annotating the original paperwork by striking out items we can not claim for (see below for the criteria), and numbering the items we can claim for.
– Data entry: we already have an MS Excel macro application (see attached) where we enter information for each allowable item. This uses an existing database of around 16,500 codes for allowable items (which we add too). The calculations we need to submit to the claim are the output of this stage.
Desired Process
As the format of the original purchase evidence is in standard format (of 3 or 4 distinct types), we would like to be able to scan and OCR this paperwork (we have the hard/software to do this, scanner is a Kodak i1220 plus) and export the OCR in a usable and editable format (there are range of options from the software Omnipage 15; all MS packages, .csv, HTML, etc.) and at this point number all items sequentially starting at 1. Each line of data would reflect one purchase and include the information necessary to process the item, i.e. price, date purchased, code and or description.
We would then like to automate as many of the rules in the ‘Preping the receipts’ section below. It would be helpful at this stage to have an output of the allowable items and a list of exceptions for each run so that we can continually fine tune the criteria.
Once the prep stage is complete we would then want those allowable items to be run against the MS Excel macro tool and produce the output.
It may be that the stages can be merged and through exceptions we can continually add to 2 databases: allowable items and none allowable items.
Considerations
We use MS Office 2003
We would want to run per client and there may be differing formats of evidence per client.
We would want the ability to enter item details manual at the Data Entry stage as some purchase evidence can be scanned.
Users are competent but not IT experts
The existing Excel Macro is attached as well as examples of the purchase evidence
Next Steps
Project is to start ASAP and to be delivered by the first week of September. Fixed priced for the job is preferred.
Preping the receipts
Only certain items can be included in the claim.
– Remove any items not dated between the 6th April 1997 and the 5th April of the most recent tax year.
– Remove any items under £10.00 after VAT or £8.51 before VAT. This includes any items with nil value i.e. 0.00
* Beware of MAC statements as they tend to be printed as gross figures rather than net *
– We must provide descriptions for all items in the claim therefore, highlight any item without a description or which is not legible as the description will be sourced at the data entry stage.
We can only claim for tools and can only make a claim for each item once; therefore non-tool items and duplicates of tools will need to be removed from the claim. We also can not claim for repairs of items or consumables (items that must be replaced regularly because they wear out or are used up e.g. light bulbs, blades)
Items which should definately be removed are;
Batteries, blades, workwear, socks, promotional clothing/items, car parts, torches (although we can allow one gas torch), lights, mirrors, mats, alarm clocks, watches, stools, boots, gloves, caps, tool box covers, organisers, shelves, welding masks, magnetic trays, trays, racks, draw dividers, CV boot kits, socket rails, repairs etc.
* For items which have a code but no description, these are some of the codes which relate to these items, EAS codes, CMC codes, CPL codes, MECGL codes. These can all be removed without highlighting the items for a description.
As well as needing a description, all receipts must have on them the client’s name and the date that they were purchased. If there are receipts/items without this information and the item is for over £200 please contact the client to try and obtain this information so we can include it in the claim.
Please note:
* if more than one item is purchased on the same receipt and only one total figure is provided then cross through the total, divide by 2 and rewrite this total for 1 item on the receipt. This can then still be included in the claim.
BEWARE of totals with 2 items that once divided would be below £10.00 gross.
* include items with minus figures unless they are below the £10.00 rule above.
Once you have checked through the above points, each item we are claiming for needs to be numbered so we can input the figures to a spreadsheet. Number the receipts 1, 2, 3, 4, 5..etc ensuring all items we are claiming for are numbered.
Write the number next to the figure excluding VAT (net) on the receipt.
File is now ready for data entry.
