Purchase VAT invoices - The Book-keepers Forum (UK)

DSS · Member

Purchase VAT invoices

PhilMcTankup · Senior Member

Hi DSS,

Welcome to the forum. I'm not a VAT expert but I'll kick off with what I think, others will no doubt correct...

Invoice should really show VAT amount charged and rate used (a legal requirement?). You don't say what goods are so they might be zero rated or even exempt from VAT. Without this info you don't know whether and if so how to include this item in the VAT return.

Difference between inv amt and payment made is £14.60, this is 10.24% of inv amt so doesn't look like a cash discount. Could it just be a part payment of the invoice? Could be there has been a dispute and seller has agreed to reduce invoice amount, in which case you should receive a credit note to post aswell.

I think you need to get VAT rate+amount from supplier and reaon for part payment from your customer before you can post this item in the accounts.

Hope this helps.

Wella · Expert

Hi & welcome to the forum

It is acceptable to issue an invoice that is less than £250 inc VAT without showing it seperately.

There are a couple of things to consider, regarding the amount recieved, is the client on cash accounting, or the standard method for VAT. Also does the invoice allow for any early settlement discount?

If the client is on cash accounting, then he will only need to add 108.94 to his outputs, with 19.06 VAT, on the return.

If the client is on standard accounting, then he will have to enter the amount invoiced on the return (£121.36 + 21.24VAT). If a settlement discount is allowed then post £108.94 to sales, 19.06 to VAT liabilities and £14.60 discount allowed account.

The VAT on the invoice will depend on whether a discount is offered

Bill

Wella · Expert

Phil

You beat me to it

PhilMcTankup · Senior Member

I did Bill, but you obviously know a lot more than I do. That's the difference between being a student, like me, and being an experienced practitioner, like you.

Good way for me (and others) to learn though and well worth the time spent getting involved on the forum.

DSS · Member

hi

First of all. Thank you so much for reply.

The client is on cash accounting. So if I understand it right the best way to do it is to look on the amount actually paid £128.00. Still can claim VAt on it (as I said no VAt brakdown)

DSS

DSS · Member

I have one more

Cleaining products bought from Sainsbury's (the same client -cash accounting) VAT number on receipt but no VAT breakdown. How to deal with that and what to do in terms of VAT return?
Please help.

Merlion ABS · Senior Member

I guess you would need to work out vat on the total amount.

To do this use the 47 calc based on a vat rate of 17.5%

To work out the vat is Total cost / 47 * 7.
To work out the net is Total cost / 47 * 7.

in a nutshell

47 = Total Amount (Gross)
40 = Net amount
7 = Vat amount

DSS · Member

thanks.I know that but not sure if can do that (post VAT ) if it is not shown on receipt

semsley · Guru

If there's a VAT number on and it's under £250 you can.

DSS · Member

thank you all. It explains a not

DSS · Member

hi
Any ideas how to deal with VAT on postage (stamps). is it zero rated or non-listable????

PhilMcTankup · Senior Member

Exempt old chap. Tax code T2 if you use Sage.

DSS · Member

THX

fin6y · Veteran Member

For Sainsburys specifically, if there is an asterisk to the left of an item on the receipt it means that VAT is included (just for future reference)!

I have an entire list of different supermarkets/stores which don't include a VAT analysis but have codes on their receipts to distinguish between zero and standard rated which has proved very useful!!