My new client is using Flat Rate Vat (as per my previous post) but he is also a subcontractor.
I'm basically preparing a years worth of accounts for his accountant so trying to reconcile what the VAT should be to what he has actually paid, after calculating it himself.
I just want to make sure I'm doing it correctly as I can't get anything to reconcile.
Say he has an invoice for £100 plus Vat, so total is £120. He then has 20% deducted by the contractor so amount he receives is £100. However when calculating his VAT liability it needs to be 9.5% of the invoice total of £120.
Also as I'm using Quickbooks my version doesn't offer the option for flat rate so I'm doing all supplier invoices as zero rate, then obviously the output is going as 20% so do I calculate what the 9.5% is then do a journal from VAT liability to P&L for the remaining amount.
Also, I'm used to working from a contractor point of view where we post the CIS deduction (on Sage) to 22xx to pay with the PAYE. As a subcontractor, is the best way to create a CIS deductions account in the COA to post credit notes for the deductions to so client invoices are showing as fully paid.
Many thanks.
