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Post Info TOPIC: Vat on Sales Commission in Sage


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Vat on Sales Commission in Sage
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This is my first post so would like to say hello to everyone first of all.

I'm after a little advice on how to post sales commission and vat in sage.

Basically, we send the invoices out to our customers and the payment for them is received in our bank account through a third party that charges 5% sales commission on each invoice + vat.

So the problem is that because we transfer our sale invoices through another system onto sage using the audit trail import function, the balance for each customer shows up as full amount but because we only receive the amount after the commission and vat is taken off, when we post the amount received from the customer in sage, the balance of each invoice remains which is effectively the 5% sales commission and vat charged by the third party.

I'll be thankful if anyone can help me regarding that issue. I hope I have explained everything in detail.

Regards
Haris



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You could post the commission (and VAT) as a dummy sales credit note on Sage.  This would clear the customer balance and, if you post the credit note to a commissions nominal code, accurately show the commission.



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Pearce & Co - Chartered Accountant and Chartered Tax Adviser 

www.pearceandcoaccountants.co.uk

These comments are outline only and are not a substitute for specific professional advice.



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Thanks for the reply Robert, I have already tried to do that and it works for crediting the customer account as well as sales commission been showed but the problem arises in the vat because then it credits the vat liability instead of adding it to the liability for us to claim it.



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Thanks for the reply Robert, I have already tried to do that and it works for crediting the customer account as well as sales commission been showed but the problem arises in the vat because then it credits the vat liability instead of adding it to the liability for us to claim it.

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I agree with Robert, that is exactly how I would do it too

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Bruton Young Bookkeeping - www.brutonyoung.co.uk



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hi Haris,

welcome to the forum

Tim



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I'm trying to post but it's not letting me arghh!

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Oh it does let me now ! Right, that's exactly what I tried to do but the problem arises with the vat liability because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

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Veteran Member

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Oh it does let me now ! Right, that's exactly what I tried to do but the problem arises with the vat liability because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

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Veteran Member

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Oh it does let me now. Right, that's exactly what I tried to do but the problem arises with the vat liability because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

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Veteran Member

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Date:
Permalink Closed

Oh it does let me now. Right, that's exactly what I tried to do but the problem arises with the vat liability.

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Because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

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Because if I credit the customer account with vat then it credits the vat liability too.

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Veteran Member

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Date:
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Because if I credit the customer account with vat then it credits the vat liability too

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Doesn't work!
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Oh it does let me now ! Right, that's exactly what I tried to do but the problem arises with the vat liability because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

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RE: Vat on Sales Commission in Sage
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Oh it does let me now !

Right, that's exactly what I tried to do but the problem arises with the vat liability because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

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Because if I credit the customer account with vat then it credits the vat liability

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Senior Member

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When you say a problem arises with VAT liability what exactly do you mean? And is your company VAT registered?

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Bruton Young Bookkeeping - www.brutonyoung.co.uk



Veteran Member

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For some weird reason, it's not letting me post in the forum. Right, that's exactly what I tried to do but the problem arises with the vat liability because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

__________________


Veteran Member

Status: Offline
Posts: 28
Date:
Permalink Closed

Because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

__________________


Veteran Member

Status: Offline
Posts: 28
Date:
Permalink Closed

Oh it does let me now !

Right, that's exactly what I tried to do but the problem arises with the vat liability because if I credit the customer account with vat then it credits the vat liability too which is wrong because I need to claim the vat back that has been charged by the third party.

__________________


Veteran Member

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Does it work?

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Veteran Member

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Right, it's not letting me write a full message.

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Senior Member

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haris wrote:

Thanks for the reply Robert, I have already tried to do that and it works for crediting the customer account as well as sales commission been showed but the problem arises in the vat because then it credits the vat liability instead of adding it to the liability for us to claim it.


Posting a dummy sales credit note should reduce your VAT liability (assuming that you're calculating VAT on an invoice basis).  There will be an issue with your VAT return in that the dummy sales credit notes will be reducing box 1 and box 6, whereas you want them to be increasing box 4 and box 7.  You'll probably need to make a manual adjustment for this.  



__________________

Pearce & Co - Chartered Accountant and Chartered Tax Adviser 

www.pearceandcoaccountants.co.uk

These comments are outline only and are not a substitute for specific professional advice.

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