I am currently doing the 2010 accounts to ETB for a new client. He was late registering for VAT, as a result some of the VAT transactions relate to the 2009 accounts which have already been finalised.
When doing the etb, should I put the transactions through the 2010 accounts? E.g. of the late VAT calculation, £94 was input tax relating to Motor fuel in 2009 accounts and £3524 relates to VAT reclaimed on fixed assets at point of registration.
Do I Dr VAT Account £3618 Cr the Fuel in 2010 accounts. £94 Cr Fixed Assets £3524
and then request the accounts to put a note on the accounts to explain the figures?
When you say he was late, do you mean the fuel was bought before his VAT registration start date? If so, you cannot reclaim that.
Or do you mean he should have registered earlier? In which case do HMRC know about it, presumably they would have given guidance/demands for unpaid VAT/penalties.
If the scenario was this: He should have been registered earlier but (for some very odd reason!) the only VAT was input for the fuel, and HMRC know about it, then your journals look good to me :)
Yes he should have registered earlier. He went over the threshold, but didn't tell HMRC or his accountants until 10 months later. His accountants therefore sorted out what was due to HMRC including the late penalty fine.
Of that 10 months, 2 months relate to the 2009 accounts, already finalised and the rest relate to 2010 accounts. So just wanted to make sure that I was correct in crediting the expenses for input vat that related to 2009 accounts. (Not just fuel, there's other expenses as well)
Just a note I always thought that you could still claim back VAT prior to you registering for up to a year for fixed assets and I think 6 months for expenses cant remember as I had to deal with this issue prior
Vat can be reclaimed on fixed assets that are still in your possession at the date when the businesses should have been registered. You can actually go back upto 4 years. This also applies to stock that was purchased but still not used, or has been converted into the end product, but still not sold.
Other costs/services is 6 months providing they haven't already been consumed.
All this was dealt with by the accountants though, I just have the journal to process.
Hi Gill, I thought you could go back only 3 years not 4 for the VAT on business assets still in the business ? I got this from an ATT seminar a few weeks ago. Where did you get the 4 years from please ? Bev
Gill, you need to miss out the fuel. I doubt you would be able to prove that it still existed in some vehicle by the time registration kicked in (unless it was something like heating fuel and it was Summer, so none was consumed).
Thanks Quentin, but its ok for me to include the fuel, as this has only been reclaimed for when the business was VAT registered, not for fuel purchased before the registration date.
