Stamps and vouchers

What it means

Stamps and vouchers are items of value the company buys in advance and uses later: postage and duty stamps, meal vouchers, electronic motorway vignettes, phone top-up coupons or prepaid fuel cards. In the accounts they belong to short-term financial assets alongside cash and bank accounts.

On purchase they are booked to a separate account and only become an expense when used, for example when a letter is posted or a voucher handed to an employee. The principle is the same as for inventory: the cost belongs to the period of use, not of purchase.

Companies holding only small amounts may, under their accounting policy, simplify things and expense minor items at purchase. For meal vouchers and fuel cards we do not recommend this, because of the amounts involved and the tax implications.

How it works in practice

Most of the stamps and vouchers our clients hold are meal vouchers. The company buys them at face value and, when issuing them to staff, books as an expense the part that is tax-deductible, with the rest paid by the employee or the social fund. The meal contribution must therefore match the record of vouchers issued.

They are recorded much like cash, in the cash book or a separate register of receipts, issues and balance. At the annual stocktake the balance is physically counted and entered in the inventory list just like petty cash.

VAT depends on what the item represents. Postage and duty stamps are exempt or outside the scope of VAT, while for vouchers for goods or services it matters whether they are single-purpose or multi-purpose vouchers for VAT, which decides when the company deducts the input VAT.

What to watch out for

Such items are easily lost: vouchers in a drawer, coupons in the car, stamps with the secretary. Without a record of issue their purpose cannot be proven at an audit, and the tax office may refuse the cost as a deductible expense.

Items with limited validity, such as vouchers with an expiry date, also need watching over time. Unused ones after expiry are a loss that has to be booked, and exchanging them for new ones usually carries a fee.