I just wondered how you process this in Sage? Say a car was bought for £4,000 and sold for £6,000. The scheme means they only pay VAT on the £2,000 they made - right? So do you need to do a journal for this? How do I input it into SAGE?
i have come across this in practice. I would suggest you account for everything gross, and then calculate the VAT manaully. Then use a journal (making sure you use T1 so it shows on the VAT return) to debit the sales and credit the VAT account with the actual amount of VAT, for the quarter/month.
Hope this helps.
Nick
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Nick
Nick Craggs FMAAT ACA AAT Distance Learning Manager
Thank you very much. However, they are not VAT registered. They are a very new client, I didn't realise. So I just enter all transactions as T9? Keep a log of the cost cars are bought and sold for in case he does become VAT registered and then I can claim back the last three years - is that right?
In this case though the cars are not assets and actually good bought for resale so you cant go back three years, not that you would want to though as this would mean an outflow of VAT.
You can use T9 or T0 if you want, it doesnt really matter.
Kind regards
Nick
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Nick
Nick Craggs FMAAT ACA AAT Distance Learning Manager
So if everything is t9 or T0 in sage. When it comes to working out the VAT - I don't need to? I've only ever done VAT registered accounts before so I'm a bit baffled that in theory it makes everything so simple.
