Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Enquiry Manual

From
HM Revenue & Customs
Updated
, see all updates

Examining Accounts: Cash-Flow Tests

‘Surplus Cash’

Cash flow tests can also show surpluses at various dates in the accounting period. Surpluses may equally throw doubt on the records, or explanations about banking or cash handling practices.

For instance, if a taxpayer tells us that they bank all their takings on a Monday except for a £200 float, the following situation would require an explanation.

Week 10

    £
     
Balance brought forward from week 9 (ends Sunday)   1200
Cash takings   2500
    3700
  £  
Monday - cash to bank 1200  
Cash expenses 100  
Cash drawings 100 (1400)
    2300
Week 11    
     
Monday - cash to bank   (1300)
Cash surplus   1000

The float of £200 at the beginning and end is excluded.

You will need to consider what may have happened to the £1,000?

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)