I've just picked up a client who will fall under partial exemption. It will be a fairly big bookkeeping job and I normally put things on Sage but I don't think Sage will be great for partial exemption (or would it??) so I was thinking of trying to whip some sort of spread sheet up, however not being one who likes to re-invent the wheel I wondered if anyone knew of any software/ready made spread sheet packages that were perfect for this type of job?
Partial exemption just means excluding a fraction of the vat. It really will not make a big deal what accounting system you use, you work out the total and then knock of the fraction.
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My first foray into book-keeping and accounting back in the 1980s involved partial exemption. I used department codes and custom VAT codes in Sage. It worked a treat.
In preparing the client's first VAT return under partial exemption, I found we were just the wrong side of the de minimis limit. I suggested that a small part of my own fee could reasonably be reallocated to a different department. This tipped the balance, resulting (if memory serves) in a £7,000 saving.
I was just trying to get my head around how it would work, I can certainly set up different sales nominal for standard rated and exempt and therefore work out my percentage but it was then working out which of the output tax was fully attributable, partially attributable and exempt. Perhaps BK1928 (W)'s suggestion of using departments might be the answer. Thanks guys.
I have a client whose first VAT quarter as partially exempt is coming up. She uses Quickbooks and not sure how this will handle partial exemption. It is the first time I have dealt with this as well, so a learning curve for both of us. I understand the principle and how to work it out, and was actually thinking of doing a spreadsheet myself, but wondered if I might see a copy of yours Sharon, just to get me started? You can email it to pauline@phoenixhbnt.co.uk if that's ok?
Thanks a lot in advance
Rob, how do you decide what is exempt, fully attributable and partially attributable? Is it down to you or does your client let you know?
