Vat on food - The Book-keepers Forum (UK)

Rhianrach · Expert

Vat on food

Shamus · Forum Moderator & Expert

Hi,

for butchers it should be zero rated rather than exempt.

for the bible on VAT for food processing refer to :

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000110&propertyType=document

hope that this helps,

Shaun.

P.S. Don't tell Rob that I've spoken to anyone in relation to meat processing otherwise he'll be outside my office with a bunch of tree huggers with placards!

-- Edited by Shamus on Wednesday 17th of March 2010 06:52:55 PM

Rhianrach · Expert

I shall have a look through once the young ones are in bed thanks.

This has been an ongoing issue which the owners are adamant on, and I find it hard to argue with them as one of them is actually (though it's a while ago now) a trained accountant. smile

Cheers for your reply

Rhianrach · Expert

Shamus wrote:

P.S. Don't tell Rob that I've spoken to anyone in relation to meat processing otherwise he'll be outside my office with a bunch of tree huggers with placards!

-- Edited by Shamus on Wednesday 17th of March 2010 06:52:55 PM

yeah seemed to read somewhere he's a veggie, smile

Won't be getting any help out of the 1st/2nd amigo huh wink

Shamus · Forum Moderator & Expert

Even trained accountants don't know it all. If they did 50% wouldn't be a pass mark for the accountancy exams!

Where the foundations of bookkeeping remain pretty constant accountancy is more based in financial reporting and tax law so it's basically changing all of the time. Especially at the moment with the move towards international harmony of accountancy standards.

Once you've had a read of the link you'll see what the facts are and they won't be able to argue with those.

Sorted.

Shaun.

semsley · Guru

Hi

VAT on food is zero rated and should be coded as such irrespective of whether or not the supplier is VAT registered. All supplies should be shown as purchases on the VAT return and any T9 item does not appear on the VAT return at all because it is "outside the scope" of VAT.

Have fun with V700 !!!!!

Sheila

-- Edited by semsley on Wednesday 17th of March 2010 07:04:37 PM

Rhianrach · Expert

semsley wrote:

Hi

VAT on food is zero rated and should be coded as such irrespective of whether or not the supplier is VAT registered. All supplies should be shown as purchases on the VAT return and any T9 item does not appear on the VAT return at all because it is "outside the scope" of VAT.

Have fun with V700 !!!!!

Sheila

-- Edited by semsley on Wednesday 17th of March 2010 07:04:37 PM

Oh bugger, if thats right then I have roughly 300 transactions to change the tax code on. bleh

Thanks for the help I shall go and absorb this here V700 and as Shaun suggests get some ammo for next time I'm in, thanks again all smile

Rhianrach · Expert

Well I've read it and yes you are all right so thanks, I shall print that section out and let them read it.

Good reading really as it sheds light on output tax for slaughtering which means any invoices we have I have to credit back the slaughter charge and levy at T1 inorder for it to show as output.

Any ways thanks again. wink

RobH · Expert

Who said slaughter???? Right my tree hugging possee up to Staffordshire and bring your placards!

Rhianrach · Expert

RobH wrote:

Who said slaughter???? Right my tree hugging possee up to Staffordshire and bring your placards!

Seriously it's fine no need for the posse these are a rare breed of Tofu livestock specifically bred for the discerning palate. They are found grazing generally in the same place as Haggis and manage to live in reasonable harmony. confuse

RobH · Expert

Cheers Steve, I suddenly feel all becalmed..now where's my nearest tree, I need a hug!

Rhianrach · Expert

I too need a hug as I seem to have 696 transactions that are T9 and need changing to T0 (some of which sage kindly tells me that amending this field will cause discrepancies between your vat return and your tax control accounts), though this is only the ones that are purchase payments, the invoices have no such warning.

Stupid me that must be because purchase payments are T9 doh confuse

-- Edited by Rhianrach on Wednesday 17th of March 2010 09:12:07 PM

RobH · Expert

Steve, I will get strung up by the bookkeeping purists, but personally I wouldn't bother, I'd just start doing it right from now on. You will still have a vat control acount that is ok, it really isn't going to affect anything that much and you did it on the instruction of the accountant. HMRC would possibly bring it to your attention if there was an inspection but they wouldn't do anything else. Or you could just post a whacking great journal from T9 to T0.

All information is given in good faith, this amigo accepts no responsibility for any action or inaction that may be taken as a result of this advice!!!!

Rhianrach · Expert

RobH wrote:

Steve, I will get strung up by the bookkeeping purists, but personally I wouldn't bother, I'd just start doing it right from now on. You will still have a vat control acount that is ok, it really isn't going to affect anything that much and you did it on the instruction of the accountant. HMRC would possibly bring it to your attention if there was an inspection but they wouldn't do anything else. Or you could just post a whacking great journal from T9 to T0.

All information is given in good faith, this amigo accepts no responsibility for any action or inaction that may be taken as a result of this advice!!!!

It's not so bad just whittled it down to 331 as I don't (think) I need to change the payments as they should be T9, and to be honest I would like them all to be the right code, don't really want to cause any problems with the vat man hmm

, plus I'm a tad anal about things being right biggrin

Whats this whacking great journal you talk of how do I do one of those and will it make my life easier?

RobH · Expert

Well my mind is a tad fuzzy from being up at 5 and drinking too much wine, but I think doing a journal like:

dr 2200 (output tax) T9 £xxxx
cr 2200 T0 £xxxx

should work..maybe?

RobH · Expert

Based that journal on sales, but it was purchases wasn't it! Similar principle though!

Rhianrach · Expert

It changes the T to 0 which is good, hopefully that will save me huge amounts of time smile

It doesnt change the code in the audit section they still show as T9 but that shouldn't matter really should it.

Thanks for that your a good man smile

RobH · Expert

I'd do it in monthly batches Steve, so it is a bit more obvious re: the VAT return. You will get a load of 'transactions prior to the date' in the next vat return but it is all explainatory. You may want tyo wait until one of the technically sound bookkeepers post though.

Rhianrach · Expert

I'll have a chat with them next week when I'm in and see what they want to do, at least thanks to you I know I can sort it out relatively easily smile

Lisa Jo · Senior Member

I would just do a journal, printing off the transactions, debits & credits and doing a batch ensuring the T1 & T9 codes are entered on the journal. I do a couple of year ends for a butchers, they are all zero rated but most butchers are in fact registered for vat for the claiming back of expenses, ie fuel, stationery & they pay a large amount out for bags to bag up the meat which is all claimable.

Rhianrach · Expert

Lisa Jo wrote:

I would just do a journal, printing off the transactions, debits & credits and doing a batch ensuring the T1 & T9 codes are entered on the journal. I do a couple of year ends for a butchers, they are all zero rated but most butchers are in fact registered for vat for the claiming back of expenses, ie fuel, stationery & they pay a large amount out for bags to bag up the meat which is all claimable.

"I would just do a journal, printing off the transactions, debits & credits and doing a batch ensuring the T1 & T9 codes are entered on the journal."

smile

I'm pretty new to this so bear with me,

Ive gone through all of the transactions on the system in financials (sage) and checked that all the purchases are T1 where they need to be and all the rest are T9 (where there is no vat on the purchaseand understanding that they should in hindsight of been T0), there are no debtors as it's a shop so it's all cash in the till and I make sure that the few vat sales are shown seperate from the rest that aren't vat sales, everything else is expenses like wages etc that are all at T9.

Question is, is this what you mean? smile

Steve

-- Edited by Rhianrach on Wednesday 24th of March 2010 05:06:31 PM