Question asked by Kate Barron 8 years ago
Hi There, i've just signed up with Clearbooks and want to know to record things..
I've uploaded my credit card statement to Clearbooks and want to know what to do with the non-business, personal transactions that i wont be claiming VAT against?! any help would be most appreciated
Thanks
Hi Kate - Woo you leave the easiest question till last !
Sorry not enough space here but, to summarise, goods or services you buy in that don't carry VAT will fall into 4 categories, Zero Rated, Exempt, Bought from a non VAT registered businesses and "Out of scope".
The general rule is that only the last category should be left out of the VAT return by picking the Exclude rate or "Out of scope" treatment, all others are recorded using 0% VAT and one of the other treatments.
There are exemptions to this general rule but most people don't need to worry about them, so all you have to do is identify out of scope expenses and exclude them from the return. Your drawings/personal items are a typical example but for a list have a look at section 3.8 of this guide for items not to include in Box 7 of the return:
Best answerHi Kate
If you are a Ltd Company then you'd normally put these to a director's loan account, showing that you owe the money back to the company. Most DLAs are set up as bank accounts so you show the payment as a transfer to the DLA.
If you are self employed then put the payments to the "Drawings" account.
Great, thank you so much. And just finally, what about things that I know i can't claim VAT back on? Do i just state 'don't include in VAT return' thanks
Hi Kate - Woo you leave the easiest question till last !
Sorry not enough space here but, to summarise, goods or services you buy in that don't carry VAT will fall into 4 categories, Zero Rated, Exempt, Bought from a non VAT registered businesses and "Out of scope".
The general rule is that only the last category should be left out of the VAT return by picking the Exclude rate or "Out of scope" treatment, all others are recorded using 0% VAT and one of the other treatments.
There are exemptions to this general rule but most people don't need to worry about them, so all you have to do is identify out of scope expenses and exclude them from the return. Your drawings/personal items are a typical example but for a list have a look at section 3.8 of this guide for items not to include in Box 7 of the return:
Best answer
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