I have a client that has just registered for VAT and wants to claim for items purchased before registration that are still in use in the business. How do I put that into QuickBooks? Let's say the VAT amounts to £100. I have at the moment put in a bill for -£100 with £100 VAT. ie the net effect is zero but the VAT is claimed back. But in that case I end up with -£100 in my Misc expenses. Which maybe right because presumably if the VAT is claimed back, that amount can't be offset as an expense to the business so needs to be added back in.
I've been thinking about it too much and my brain is aching so help would be appreciated.
So pre VAT you would've put £600 cost through to let's say fixtures and fittings. This would've been represented by an invoice of £500 plus vat. So now you would need to reduce the fixtures and fittings account by £100 and move this to the VAT account. That would represent the amounts had your client been registered form the start. Rather than use misc expenses just to lose one half of the double entry. Think of the transaction how it was, then how it would've been, then you can work out the journal entries required.
HTH
__________________
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
