I have a client who is de-registering for VAT. I have calculated the VAT return as normal on a spreadsheet (Cash accounting) and got a set of figures. Now in the VAT notes it say that you must account for STOCK/ASSETS if the VAT owed id more than £1000. Well my client's stock is more than £1000 in VAT so we are doing a closing stock for that period.
This is where I am not sure, I have spoken to HMRC about this and they say that the STOCK figures, the VAt should go in Box 1 and the Net Stock should go in Box 6 so it in theory gets added back into the VAt return as goods can be sold after the Vat de-registration that the VAt has already been reclaimed on. I get that bit and we have a closing stock figure, but the bit I am unsure about is the purchases and sales for that quarter I have already accounted for in my first set of figures in the VAT return. By doing an opening stock at the beginning of the quarter and then a closing stock at the end (de-registration date), am I not accounting for thos figures twice???
Its late and I am getting abit confused!
Or do I do the opening stock and closing stock with all the Purchases and Sales to find out what stock is left over that we have already claimed the Vat back and then in the purchases part of the vat amend it to take in account for the odd bit of petrol (not much) that the Vat was claimed for and any small things like stationery that would have been used up by now?
I'm probably not making much sense as its late. I did ring HMRC today and they were there usual self. (bloody useless)!
Any light anyone can shed on this would be great as its driving me nuts and need to be correct as its the last one!
many thanks
-- Edited by Amanda on Friday 11th of May 2012 11:16:35 PM
I would put your actual closing stock at the period end, as the difference will be cancelled by any purchases sold in the period. If that makes sense?
If no purchases sold
VAT
£
DR
CR
Sales
1000
200
Opening Stock
2000
400
Add Purchases not sold
1000
200
Closing stock + sales
4000
800
(Going to box 1 & 6)
Purchase
1000
200
(Going to box 4 & 7)
VAT due
600
If some purchases sold
VAT
£
DR
CR
Sales
1000
200
Opening Stock
2000
400
Add Purchases not sold
500
100
Closing stock + sales
2500
700
(Going to box 1 & 6)
Purchase
1000
200
(Going to box 4 & 7)
VAT due
500
I find it easier to to show an example to explain. During the period some purchases were sold, so the vat can be claimed. The remaining purchases in stock are reversed out by adding to the opening stock
Hope that makes sense
Bill
Edited because excel format did not copy through properly. The column headings (£ DR CR) need to be shifted right. The first column of figures is the net value
-- Edited by Wella on Saturday 12th of May 2012 05:51:57 PM
Thanks for coming back to me, that is what I have done but on a slightly different spreadsheet, but it still equates to the same so at least I know I am right.
