Hi all hope you can help me here ! I have looked through the forum but still cant quite find what I need - basically a customer paid us a large deposit for which we paid the VAT on I am now in the next vat quarter and he has supplied us with a VAT Code so his invoice is T4 and he doesnt pay the vat !
How do I correct this on sage so the vat return picks it up as putting credits etc through doesnt work on the cash vat sage version and Im a bit stuck
"he has supplied us with a VAT Code so his invoice is T4 and he doesnt pay the vat !"
Your customer will need to reclaim the vat back on their vat return, not via your company.
What you did with paying vat element on the deposit to HMRC is fine.
With deposits, (even for companies, who use the Accrual scheme for VAT), if the depsoit is paid before delivery date or invoice date; the supplier has to pay HMRC, vat element of deposit in current vat quarter, even if invoice or delivery of product occurs after the vat quarter.
For the next vat quarter, considering your company is on cash accounting scheme; you need to pay VAT element on receipts from the customer during that return.
Thanks for your reply, however I am now more confused! The customer is a VAT Registered in EC and the goods are being shipped out of the country so from my understanding there shouldnt be any VAT at all - which is why I thought I could claim back the VAT already paid - does this make sense??
Ok if the customer is based in the EC and the goods hadn't been shipped from UK as yet and your organisation uses cash accounting principles.
then unfortunately in the vat return for period when you received the depoist, you have to treat the deposit as vat inclusive. so what you did was the correct treatment.
Once the goods have been shipped from UK to EC and there is cosignmnet documentation to prove they have been shipped, then the transaction becomes a zero rated VAT supply.
you would then make adjustments in next vat quarter (if goods were shipped in next quarter and you have proof of shipment).
lets say your received £1200 deposit
last vat quarter, I presume journal was
Cr deposit account £1,000 box 6 on vat return Cr Vat account £200 box 1 on vat return Dr bank £1,200
the goods get shipped in this quarter and you have shipping documentation
this vat quarter
30th June:
DR VAt account £200 Cr deposit account £200
on this quarter vat return form subtract £1,000 from box 6, subtract £200 from box 1 and add £1,200 to box 8
Dalbir
-- Edited by Dalbir on Thursday 30th of June 2011 01:52:40 PM
