Have a customer with VAT cash accounting. Payment made to supplier for rent/it services etc (serviced offices so loads on invoice!) - didnt have the invoice but marked invoice as VAT included as the suppliers do charge VAT. VAT return completed and reconciled.
Several months on and finally got the invoice and when keyed to match to the payment it threw up the following error message:-
''there is a mismatch in the net/tax elements of the payments selected''
This is due to the fact that a one -off item included in the invoice isnt subject to VAT (for late payment interest!). The amount of VAT overclaimed is £17.80.
The supplier account is correct - P/acc o/s and invoice o/s = same. Purchase tax control is correctly showing VAT as per invoice.
But -what entries do I key to reduce the actual VAT due on the next return? Do I need to do anything else? Brain ache!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
The long way round is to raise a credit note and another invoice with matching Vat codes to the ones already on Sage- I hate cash accounting simply for this reason!!
The new version of Sage (Sage 2014 Vat version) is a little simpler- it allows you to change the tax code and then it asks if you want to recalculate the Vat so you can select yes
OMG - thats so simple, when you know how, even though it might be a long way round! Thank you, Sharon my cash accounting guru! The Accountant said he doesnt do a vat reconcile just because of such things, but I would need to ponder on this one a little more, guess it depends on how many such issues I come across (or create!)
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hardly a guru lol but I do have quite a few cash accounting clients. Yes that's the problem once it's reconciled you can't change things very easily- although as I said -the new version does help. How does the accountant cover any transactions that are entered after the vat return is run without keeping a manual record ? I like to reconcile each period then I can assess any older items
The Accountant said he doesnt do a vat reconcile just because of such things, but I would need to ponder on this one a little more, guess it depends on how many such issues I come across (or create!)
