First time VAT Return

Question asked by Adrian Maguire 7 years ago

Hi,

I am new to clearbooks but getting along so far. I am about to work through submitting a VAT return for the first time on CB. However, there is a slight complication in that I have started CB 1 month into a VAT qtr. I am on cash accounting and the Qtr runs March April May. March is on by old system for which I have a figure for Vat owed to HMRC for that month. What is the best way to run this first Qtr with the months of April and May on CB plus the figure from the old system. I also have my own HMRC user ID and password.

Feedback appreciated. Thank you. Adrian

PS. I should add, that I am not an accountant or book keeper but do understand the double entry system.

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5 Replies

Hi Adrian,

You have two options, the first being the best for audit purposes.

  1. Run a return on your old software for the first month, run a return on Clear Books for the following two months and submit the details externally, on the VAT return tool with HMRC. Then, create a journal in Clear Books for the first month as an opening balance.

  2. Create a journal in Clear Books for the first month then run the VAT return for the last two months, including the journal in the return.

Best answer
7 years ago

Hi Adrian,

That's fine, you are correct :)

The general advice is not to confirm a VAT return until everything necessary is included within it.

7 years ago

Hi Aran. Sorry, I acted before your reply came through as i wanted to get the return submitted on HMRC. And as you say it has created a PI for the just the two months on CB. So to correct now I am thinking the best option is to post a PI for the VAT amount owed from March on the old system to HMRC so creditors and the VAT control are complete, then when I pay the two purchase invoices in HMRC all should be right. Then going forward I will be on complete VAT quarters just on CB.

Is there any general advice of when the best time is to 'confirm' or is this 'must do' step before submitting to HMRC. I understand the locking of invoices to the return,

7 years ago

Hi Adrian,

Your opening VAT control balance journal would indeed be the journal I was referring to in my answer. Depending on whether you owe or are owed money from HMRC for March, that journal should Dr or Cr the VAT control account code.

In Clear Books I would recommend creating a VAT return for April and May, but do not confirm it. This will lock all invoices and bills to this return so that they are not picked up in future returns. Don’t confirm the return though as the system would create a bill for the amount owed for just those two months, which you don’t want.

Instead create a bill for the full quarter for the amount owed to HMRC (or a negative bill if you are owed a refund) and make sure to code this to the VAT control account code.

7 years ago

Thank you Aran for your reply.

In terms of (1) I have entered an opening VAT control blance in Clearbooks for the amount owed to HMRC shown on the closing balance sheet at Mar 31 from the previous system - would this be the same as the journal you are referring to? Or is it run the return for the 2 months figures on CB and make a payment for the owed amount to HMRC, then make a payment via a journal for the one month from the old system, then manually make the physical combined payment via the HMRC web site?

In terms of (2) how does that complete the various boxes on the HMRC form for the first month from the old system?

7 years ago

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