Question asked by jonathan long 10 years ago
we have an asset which we purchased before we were VAT registered on the flat rate scheme, which we are eligible to claim the VAT back for. I have added the purchase with the VAT etc, but the purchase doesn't show in box 4 it just shows in box 7 how do I solve this
Hi Jonathan & Vanish - using the accrual date function does work with a new business, ie where you don't have pre VAT bookkeeping. If you do have pre-VAT bookkeeping however you have already recorded the asset in your books and so this would effectively create two assets in the books, one gross of VAT and another net.
In this case, all you really want to do is take the VAT out of the original cost of the asset and putting it into the VAT account to claim it on the VAT return. This is best achieved either by using a journal entry on the first day of the VAT period or, if you are not familiar with Journals, by using your existing, or even a dummy, bank account to record (on the first day of the VAT period) money in & money out for the total cost of the asset, as follows:
Using a total cost of £2,400 including VAT, you'd record money in for £2,400 with no VAT, to the asset account and then a payment out of £2,400 including VAT at standard rate again to the same asset account. This would leave the asset account depleted by £400 and put £400 in the VAT account to appear on the VAT return.
@Vanish - it would be nice to see a "pre VAT claim" function but because it needs to cope with the above two scenarios, it think the workarounds are probably more realistic at the moment.
Best answerHello Jonathan,
The best way at the moment will be to use the toggle feature Accrual Dates. Go to Settings > Organisation > Toggle Features and then Accounting on the right.
There will be an option to turn on Accrual Dates.
Please ensure that the bill is within your VAT period, so you will need to edit the invoice/bill date to one which is in the VAT return period. This will let it flag up in the return.
Please can you then set the Accrual Date to the bill as the true billing date. This will keep it showing in the correct dates on your Profit and Loss and Balance Sheets. It will also do the depreciation on the correct dates as well.
While I understand that this should be built in, this method above will be the best in the time being. I am going to pass this onto our consultant accountant and the developers to see if this can be improved in the near future as we are always refactoring our VAT codes.
Vanish
Hi Jonathan & Vanish - using the accrual date function does work with a new business, ie where you don't have pre VAT bookkeeping. If you do have pre-VAT bookkeeping however you have already recorded the asset in your books and so this would effectively create two assets in the books, one gross of VAT and another net.
In this case, all you really want to do is take the VAT out of the original cost of the asset and putting it into the VAT account to claim it on the VAT return. This is best achieved either by using a journal entry on the first day of the VAT period or, if you are not familiar with Journals, by using your existing, or even a dummy, bank account to record (on the first day of the VAT period) money in & money out for the total cost of the asset, as follows:
Using a total cost of £2,400 including VAT, you'd record money in for £2,400 with no VAT, to the asset account and then a payment out of £2,400 including VAT at standard rate again to the same asset account. This would leave the asset account depleted by £400 and put £400 in the VAT account to appear on the VAT return.
@Vanish - it would be nice to see a "pre VAT claim" function but because it needs to cope with the above two scenarios, it think the workarounds are probably more realistic at the moment.
Best answer
You must 