I am a Spanish accountant doing bookkeeping now in England. I am a bit confuese about the VAT. I am helping doing the accounts for a Plumbing Services Self Employed person. I am using QuickFile online.
I have been entering things like road tax, mobile expenses, diesel, stationary... as Overheads (7000-9999). I also breakdown the VAT for this outgoings. I have used the (2201) Purchase Tax Control Account from Assets and Liabilities (0001 - 2999).
I also used the (2201) Purchase Tax Control Account for the VAT from the suppliers.
But now I am doing a balance sheet I am realising there is something I did wrong. Purchase Tax Control is in Current Assets and I'm not sure this is like it should be.
This business started last year 2011/2012. Does he has to file his VAT to the HR? What other taxes will he have to pay? He didnt have any incomings since he started his business on march 2012.
Where have you put the Vat on sales. What should happen is sales tax goes in one nominal, purchase tax in another then you do a journal to put them both in a control account, this will give you an amount owed to HMRC or an amount HMRC owe. It looks from your post that you have focused solely on purchase tax which in its own nominal will be an asset, when you balance it with sales tax you may find VAT becomes a liability.
Thank you for answering so quickly. There is no VAT on sales because the business started on the 1st of March of 2012 and he was only buying the stuff he need it to be ready for any job that could come in. He was looking for work but he didnt get any untill after the 6th of April. So would it be fine to have the VAT from the expenses (diesel, stationary, tools, materials...)
He says the VAT of the tickets he has should be discounted as Purchase, cos them things are for him to do his job, so he will include them on his invoices. Otherwise he will only have VAT to charge, cos he doesnt sale he does a service.
VAT is payable on services as well as sales. I take it he is saying that the goods he buys he then charges to his customers as well as for his time in fitting/repairing. VAT should be charged on both his time and any items he is recharging the customer.
