I have a client who I have just de-registered for VAT, as he has dropped below the threshold as he's sold off part of the business, so doesn't expect to go above it again.
I've dealt with de-registration in the past, but this is the first one who operates the Cash Accounting VAT scheme. So my question is - I presume I will need to 'doctor' his last return, to account for all sales VAT vs purchase VAT that he hasn't received/paid at that date? Would that be correct? He de-registered wef end Dec, and I see on line today that HMRC want the final return in by 13 Feb. That doesn't give a lot of room for him to get everything in/paid by, so I am sure there will be some alterations I'll need to do.
His accounts are in Sage. I don't suppose there is an easy way to do this?!!
Any advice on how to do this final return correctly would be much appreciated.
You will need to account for monies owing to you as well as reclaiming any VAT incurred. Bit messy as I recall but is rather like leaving the Cash Accounting Scheme.
Interested in this one too, as just client say thee accountant had suggested deregistration, so thanks for raising it! Anymore comments re how to do this in sage would be greatly appreciated (by us both me thinks)
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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
Hi Liz, yes you would need to doctor the final return to pick up the VAT on an invoice date basis. When using software, you can do a number of things:
Assuming debtors and creditors are all cleared by the time the return is due, you could run a return that started on the first day of the period but ran to the date you were generating it - so it picked up all those entries.
If you still have outstanding debtors and creditors by the time the return is due, you can pay them off using a dummy bank account, and then create invoices that would be "outside the scope of VAT" (so T9 on sage) and instead of posting to the P&L, you post to the adjustment back account.
So £100 owed to customer A and not going to be paid for months yet
Do a customer receipt into an adjustment bank account - this creates a debit of £100 in the bank and pops the VAT entry on the return for you.
Then, create an invoice within the customer again for £100 that wont appear anywhere on the return (ie T9 on sage) and post to the adjustment bank account instead of sales.
If your particular software wont let you code a sales invoice to a bank code, perhaps set up a dummy sales account, do all the clearing and re-invoicing and you should find the balance on the dummy bank is the same as the dummy sales code - and then do a journal to clear the two.
Was ridiculously busy in December and then spent 7 days in bed with a really bad cold - totally missed new year!! I am on the mend but still coughing and congested! Since 28th December!! Cant believe it!
Oh you poor thing, sounds like a late New Year celebration is required. Be careful coughing, the last one I had in October causing bruising all round my heart, in so much pain thought I was having a heart attack. Pain lasted until Christmas. So look after yourself Mrs.
All fabulous my end thank you.
__________________
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
