Hi. I have just taken on a client that is on the VAT Flat Rate Scheme at 9.5%. I am getting myself in a right muddle trying to think through how to post his sales invoices (which will have VAT added at 15%) correctly into Sage, so that I can produce correct figures for his VAT Return each quarter, and show the correct values in his Sales lines on the P&L, and the VAT codes in the Balance Sheet. Can anyone give any guidance to this? Many thanks.
You will have to post your sales invoices as normal ie net 15,000 Vat 2250 gross 17250 as you know you wil recieve 17250 from your DEBTOR. When you are going to prepare the VAT RETURN will have to do a Journal Entry to adjust for the VAT REDUCTION
JOURNAL DEBIT CREDIT
SALES 611.25 VAT 611.25
what the above in effect will do is reduce vat from 2250 to 1638.75 which is 17250 * 9.5% THIS IS THE WAY THE HMRC WEBSITE SHOWS RELATING TO FLAT RATE SCHEME TO TAKE 9.5% OF THE GROSS FIGURE so the above adjustment will Increase SALES TO 15611.25 reduce vat to 1638.75 hope this helps.
-- Edited by Davey on Sunday 18th of October 2009 11:10:20 AM
