Allocate VAT repayment from previous accounting period

Question asked by Dave Gibbs 8 years ago

Hi all,

I hope someone can help me with this so here goes my explanation;

We started running clearbooks in house from 01/01/17, our company accounting year end is 31/01/17 (since incorporation on 31/01/2009 our books where run by our accountant), from 2016-2017 end of year we have received a Vat rebate of circa £150,000.00 and now when reconciling the bank statements I need to allocate this somewhere, how is best to do this as not to cause any issues with everything I have been accounting for since 01/01/17??

I am not very technical with CB and only really know the generic tasks that we complete weekly (invoicing/ creating bills/ reconciling the bank statements etc) so as much detail on the help from or some screen shots to guide me through would be amazing.

Thanks in advance on this one

VAT
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6 Replies

Hi Dave - tell me to mind my own business but why did you start CB from 1 January? 1 February would have been far more logical and easier to handle.

If you start running your books on a new accounting system, 11 months into a financial year there are three ways to deal with history when preparing the annual accounts:

  1. Produce a set of accounts from the old books for 11 months, then another set from the new books for a month and join them together outside the bookkeeping;
  2. Import the opening balances at 1 February 2016 and all the transactions for 11 months from the old accounting system into CB then continue with the last month in CB and this will provide you with a complete year in CB.
  3. Extract the balances on the accounts in the old books at 31 December 2016 and import those into CB then continue with the last month in CB and this will provide you with a complete year in CB. Only if anyone wanted the detail of any stuff in the first 11 months they'd have to refer back to the old books.

1 is a non-starter so, unless your accountant can easily export all the opening balances and transactions from his/her books for 11 months (2 the option I'd prefer) you will have to go with 3.

Whether 2 or 3, included in the balances brought into CB from the old system at 31 December will be any VAT balance due at that date and, obviously, the next month will add or subtract from that. You don't say if the £150K was due to you at 31 January or an earlier date, but the account holding that balance would be the one you put the £150K to.

So I think you are going to need your accountant to help you with this.

Best answer
8 years ago

Hi Dave

No, that period would be right if you were working with option 2 above, so delete that period and create a new one 01/01/2017 to 31/01/2017. Whilst you're there, if you haven't already done it, you can also set up next year 01/02/2017 to 31/01/2018.

This will change the start date to 01/01/2017

You enter +£150K into CIS Debtor (Debtors = people who owe you money & Creditors = people you owe money to).

If the £150K debtor is the only balance you enter then yes, to balance up the trial balance on that page you must enter -£150K in the retained earnings account. If nothing else though, how about entering the bank balance at 1 Jan 2017? If that was a positive £1K the balancing number bottom right would then have to be -£151K.

Are you not intending to use an accountant from now on? If not you really must do some research on CB's guides over how all of this works day to day and at the year end. If however your accountant is still going to be involved, it would help greatly if you allow them access as they could sort out this sort of stuff in minutes.

Cheers

8 years ago

Paul,

thanks for the above, just to clarify before I make these changes

when I enter Dashboard>Getting Started>Other Balances the date at the top says 'Clear Books Start date: 1 Feb 2016' , I started inputting the transactions on CB 01/01/17 should I still enter the balances in here?

also I was incorrect it was a CIS rebate we received not VAT, so would I enter this minus figure (-£150,000) into CIS creditor or CIS debtor and do I also enter in this box with the minus symbol (-) before the value?

Thanks in advance.

8 years ago

Hi Dave

As long as your books or accountant can give you a trial balance at 31 December (a list of balances that balance to £0) and you have established your first accounting period as starting 1 January, you can use the "Getting started" section under the Dashboard menu to enter the balances one at a time. There are sections to bring in the opening bank/cash balances, unpaid invoices and bills and finally all the other balances.

In this last section you will hopefully see VAT control &/or VAT payable accounts and you can put the opening -£150K balance to either of these, meaning you use that account when paying off the VAT.

Here's the general guide over getting started in general: https://www.clearbooks.co.uk/support/guides/getting-started-2/getting-started/

If you don't have a fully balanced trial balance then put in the balances you know, including the £150K, and make sure the "retained earnings" account at the bottom of the page has the right figure to make sure both columns balance.

8 years ago

Paul,

you are exactly correct but the old method we had was terrible and we urgently needed to get everything relating to sales and purchases running on 1 platform asap which ended up to be the 01/01/17 but we would still have encountered theses issues even if we did start in feb as the funds from the returns are only hitting our accounts now some 6 months later.

how would I actually go about completing your option 3? is there a way that I can enter in that the Vat or CIS was -£150,000 as of 31/01/17 so that wen the cheque is received (which has now hit our bank) I can allocate it across?

Please provide me a step by step if at all possible as anything outside m usual inputting scares me a little and I do not want to create any more issues than I am already having.

Thank you in advance for sharing your wisdom.

8 years ago

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