I just want to check. When you post money into VAT Liability on SAGE. When you come to run your VAT return will it automatically include the amount in the VAT liability section?
I'm assuming it does but want to double check as recent VAT return showed they owed us money - always makes me suspicious!
When you reconcile the VAT return it transfers the output VAT and input VAT balances to the VAT liability account which shows your net liability due/reclaimable. If you have a VAT liability then when you pay it (the month after) the VAT liability account will be cleared to zero leaving just the VAT on sales and purchases that have occurred in that month as your outstanding balance at that month end.
I work for second hand car dealer so when he buys cars and sells them I mark them T9. I then work out the VAT due to the second hand margin scheme and post this in the VAT liability.
When I then go and do the automatic VAT return in Sage to come up with the figure. Is my vat from car sales going to be picked up if it is in the VAT liability? Or should I post it somewhere else?
I guess you do a journal along the lines of debiting sales and crediting vat using T1? The credit to the vat would go to 2200 (sales tax control) and therefore shows as a creditor on your balance sheet. When you enter purchases with vat, the vat element will debit 2201 (purchase tax control) automatically. You then make a vat payment and you should post to 2202 (Vat liability) which will obviously be a debit.
When I have to post sales using the margin scheme I use two lines for each sale. So if something was purchased for £500 and sold at £750 plus vat, I would post one line for £500 at t9 and the next line with the same reference at £250 at t1. When you run the vat return is should discard the t9 element and use the t1 element so your liability would be £50.
When you reconcile the vat return I'm almost certain that it doesn't post you sales and purchase tax to the liability nominal, I think that is something you do as part of your vat routine, there is a wizard for it :)
Hi all - it very much depends on your version of Sage - but yes in the latest versions the transfer from the control accounts is part of the VAT end process by pressing the Transfer VAT icon - it is indeed a wizard. Happy to help further if you are still stuck.
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