Hi everyone, Ive recently took a role as an office manager. I am using SAGE 50 2010. I have come across old invoices that should have charged VAT as there is rechargeable VAT on these (4001). One of the company's want me to send a VAT only invoice listing the invoices with the missing VAT and one company wants me to credit the old invoices and re-issue new ones with the VAT included. will this VAT work its way into my current VAT period and is this the correct way to go about it?
Either way will work. Quickest is VAT only invoice as then its just one document, but its your choice rather than your clients. Care re the amount that hasnt been declared on time - you need to consider if you should be advising HMRC/paying fines - have a look at the guidance here www.gov.uk/government/publications/vat-notification-of-errors-in-vat-returns-vat-652
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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
I was feeling out of my depth when I took on this role as feel Im learning so much every day. The VAT thing is so complex.......do you have any idea the best way to credit the invoice (on sage50) then re-issue with the VAT included so it works its way through the SAGE system? what dates would I use and what nominal code would I use?
You can do a sage training course and there is also a practice option in the one you are using, plus their are sage for dummies books which are useful. Although a basic background in bookkeeping is useful too.
Which nominal do your sales go to - is that the 4001 you mentioned in your first post? Also what tax code (t code) did you use to key the invoices in the first place? Then one last Q - what VAT scheme are you are - standard or cash accounting?
Once I get that info I will answer the rest
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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
We are on standard (but think we should be on cash accounting)....it would normally be 7400 (travel) but because its being recharged it would be 4001....T0 was used in the original invoice
Key credit notes via Credit note icon (next to invoice icon) on Customer screen. Key them to the same nominal code as the original invoice (4001) and use same tax code T0. This will report them on the VAT returun as you did with your original invoices but not allocate or apportion any VAT anywhere.
Then go into Bank screen and use the 'Customer receipt' icon and link all your old invoices and related credit notes as this will tidy up your debtor/customer accounts so they dont have o/s invoices showing.
Then issue new invoices with VAT to same nominal, using code T1.
Care re dates - are the customers trying to get you to issue new invoices in the hope they will get extended terms from you? either date it all as per the original or (I would) date it all today but put immediate payment terms on your invoices.
(Internet keeps bouncing me off, so sorry if Ive missed anything, Im trying to get my answer done before it happens again!)
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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
thanks Joanne, a lot of these invoices date back to 2012, and have all been paid previously. they just want the VAT adding.....so much easier just to do a VAT only invoice :(
