VAT return is incorrect Sage 50 I have used T0, T1 and T8 - The Book-keepers Forum (UK)

munkeemummee · Newbie

VAT return is incorrect Sage 50 I have used T0, T1 and T8

Donna CBK · Senior Member

Not sure if late or missing the question here but a stab in the dark, are you VAT setting correct for standard VAT rather than cash accounting? Sage can only try and claim VAT if something is input in the Tax column otherwise it would be zero with all net amounts going to box 6 & 7.
Sorry I may be lostwith the question so apologies.

munkeemummee · Newbie

Thanks Donna for your reply.
The VAT settings are correctly set as cash accounting. Nothing is in the tax column... I have even been back to check.. and there is nothing at all in there.. I have also checked that both T1 and T8 are zero.. and they are... I put an invoice in for T4 (sold to EU) and that works fine...
The ledger says zero VAT in the right places... and the correct amount for T1 in the right places BUT the VAT return STILL puts the VAT (that should be zero) into the boxes. I have even gone back to check that each customer has been set up correctly and they have :-~ I don't understand. Am I meant to reconcile the VAT or do something fancy?

Donna CBK · Senior Member

Sorry, you mention VAT as Cash Accounting? Is that the correct setting for this company rather than Standard VAT?
This is a lot more complicated way of doing VAT and I do try and avoid Cash Accounting where possible.

Please feel free to email me directly as it may be easier. Maybe you could email some screen shots via print screen - may help understand yr problem areas.

info@completebookkeeping.co.uk

-- Edited by Donna CBK on Friday 25th of February 2011 06:11:38 PM

Jane Kelly · Veteran Member

Hi

I have just seen your posting and hopefully this will help:

If you are set up as VAT registered on Sage, then all transactions other than those which have a code T9 will be included when you run the VAT return.

Any items coded to T1 will be at standard rate, which I notice you have at 17.5% for pre January 2011 transactions. T0 and T8 should not be generating any VAT.

So looking at your email, it seems as though you only have UK purchases which should have VAT associated with them. Assuming that you have no UK sales, then I would assume that you have a reclaim to make from HMRC.

You say that you started your business in Feb 2010, have you not done a VAT return before? Are you actually registered for VAT?

If you are not registered for VAT you won't be able to claim anything back and it is probably best to just post all the transactions as T9 and then they won't pull through into the VAT return at all.

Hope this helps.

munkeemummee · Newbie

Thank you for your reply -- Yes we are registered for VAT and we are set up for cash accounting in Sage - this works for us and is something I feel comfortable with.

We have done one zero vat return before - we hadn't run any expenses through the business at that point and we registered for VAT after the company was formed and back dated it. We are currently late for submitting the second return based on this problem. The first return I submitted online. The personal expenses that have subsequently been entered are pre an post the date of the last return.

We have UK and EU purchases.

Just to re-iterate...

Some of them are UK purchases, some are EU purchases with VAT on... which I accept I can not claim back (and I can't be bothered to either) and some are EU pruchases where the VAT has been removed.
So I have added things as follows:
1. UK purchase with VAT number - T1 net and VAT amounts entered
2. UK purchase no VAT receipt - T0 total amount in net box
3. EU purchase with VAT - T8 - total amount (inc vat) in net box
4. EU purchase with VAT removed - T8 - total (obv exc VAT) in net box

Looking at the nominal ledger the correct T codes are assigned to the correct items - and the correct zero vat element is put in where aprropriate ...

BUT

When I run the VAT report it includes vat from both zero rated T0s and T8s. The two EU sales I have made (T4s) work fine!!!

It tries to make me pay the vat for the EU purchases and tries to include the VAT on non VAT items on the reclaim box...

Seriously....

Just to avoid any more Business questions... I formed the business and I VAT registered us! It is not the first business I have run nor the first time I have used sage! I also come from an IT background

I have tried packing and rebuilding sage.. There is nothing I can find on any forums about this..

So I am now wondering about whether i should just delete it and start again...

Thanks to all so far!

Jane Kelly · Veteran Member

Apologies, didn't mean to offend, I consider myself rapped on the knuckles! I can understand your frustration. It's just really difficult to understand a problem, when you can't actually see the screen, as I'm sure you understand,coming from an IT background.

I was going to suggest double checking that cash accounting is correctly set up, but I see you have already checked this in answer to another posting.

You mention "When I run the VAT report it includes vat from both zero rated T0s and T8s" - is this the detailed report you are running or the VAT summary report? This is the part I cannot understand as both should be zero value VAT as you suggest. I'm just wondering if the data could be corrupt? Or am I misunderstanding what the report is saying...

In terms of your next comment "It tries to make me pay the vat for the EU purchases and tries to include the VAT on non VAT items on the reclaim box..." this is normal for EU transactions to be shown this way on Sage (it might be the same for other packages). It looks like is charging VAT on the EU Sales and Purchases but the net effect will be zero, or at least it should be....

Have you tried running the appropriate day book reports from the nominal to get an idea what the amount of VAT should be? For example, running your customer receipts and supplier payments daybooks.

Finally the only other thing I would mention, which may not be relevant in this case but is useful for you know for the future (particularly with you having foreign transactions), if you ever want to use the Foreign currency part of Sage, you cannot operate cash accounting- the two do not work together.

Now I am rambling.....

Sorry, I can't think of anything else to try - perhaps other than to run a data check to see if Sage throws up any problems with the data - but I expect you have already done that.

Donna CBK · Senior Member

No I understand definately Cash Accounting - when you enter payments & receipts are you allocating against the invoice's or paying on account? Reason for asking is the VAT question that is given on payments on accounts - ie which VAT code is it T1 etc.

Also - have you completed full bank rec? The reason being Cash Accounting - if has entered on account it may increase the payment/receipt amount by the VAT value.

Hope not too confusing,