Halfway through the (company) year the business hit the VAT rate. A reclaim was made for prior years' purchases and repaid by HMRC.
The company mainly exports, so a reclaim is usually due. In the first repayment we were repaid:
1) reclaim items for the first VAT period (say, May-Jul) - these were posted with VAT status 2) some items from before the VAT period but the current FY (Aug-May) - these were edited to include correct VAT status 3) items from before the current FY - what to do with these??
As the prior year has been and gone I'm not sure what's supposed to happen with these 3rd set of items so at present they are just in the VAT account. Should I post journals to the relevant expense accounts? I'm using Xero if that makes any difference.
