I'm doing the VAT return for a paper shop and I'm a little puzzled as to how I should account for promotional vouchers which are given in payment for papers.
As things stand at the moment, when someone pays for a newspaper with a voucher it is rung up in the till as an ordinary sale and included in
the daly takings figure. A note is kept of how much is received in vouchers for the week/quarter. When the bill comes from the wholesaler there is an allowance
made (i.e. credit given) for the vouchers that have been returned to them. It seems to me I should count the cost of the purchases as the gross amount before the
voucher total is deducted, otherwise I will have acounted for the sale but with no associated cost, which can't be right.
What do others do in this situation ?
Just realised - there isn't VAT on newspapers, I know that, I'm just trying to work out what my sales and purchase totals should be.
-- Edited by Bucks Bodger on Saturday 27th of April 2013 03:43:29 PM
I would account for the sale as sale at full value then account for the refund as a reduction from the base cost of the newspaper (even if that amounts to the full cost of the newspaper).
The effect is that :
- the sales figure would be unaffected
- Cost of sales reduced
- Taxable profit increases
So basically following the approach that you have thought through and doesn't sound right but is.
kind regards,
Shaun.
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Shaun
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