I have to deal with a company, which accounts were done by previous accountant up to 31/07. VAT return was submitted for the period 31/05-31/07 in august and it was a VAT Refund. As I started doing companies bookkeeping from August (new financial year and VAt quarter), I got bank statement in witch is stated VAT refund from HMRC from previous period. I understand that I have to post it as a Bank Receipt to nominal code 2202 (VAT liability), T9, but a question is how to make this account nil. Thank you
-- Edited by Roma on Tuesday 10th of November 2015 10:00:04 AM
-- Edited by Roma on Tuesday 10th of November 2015 12:03:21 PM
When the VAT return itself was processed, the person that did it should have carried out a procedure in most recent versions of Sage called a "VAT transfer". What this does is journal the outputs and inputs VAT amounts on the return from 2200/2201 respectively, putting the values in 2202. The balance on 2202 is then the amount owed to/from HMRC, so when the payment is made (or the refund received) it zeroes 2202. On older versions of Sage this would be done as a manual journal, but the outcome is the same.
Essentially, this process debits 2200 with the outputs VAT, credits 2201 with the inputs VAT figure, and debits/credits (as appropriate) the difference to 2202.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Thank you for replay.
He submitted the return 10/09/2015 for period 31/05 - 31/07 and the repayment was in September as well. So what i have in my hand is just the amount returned. He provided me a trial balance as well for the period ending 31/07, bet in this trial balance there are no accounts concerned with VAT. Actually he used a TAX calc software. As i have just started doing bookkeeping in practice, but I think in the trial balance there should have been figures on 2202 account's debit as it is a refund, I could later clear this balance to nil when refund was made by HMRC.
Now if i am gone post the bank receipt to 2202 account credit it will sit there and i am quite confused how to figure it out to nil.
Hi Roma
I would normally suggest that its sounds like the VAT transfer out of the control accounts to the VAT liability account havent been completed in sage, via the VAT transfer wizard or journals. But you mention there are no accounts for VAT at all - so you havent got On the TB are there not two accounts in the other ranges that Vince suggests 2200/2201 called Sales tax control and Purchase Tax control?
Are you in a position to be able to ask for any sage/other software reports from the Accountant or is the relationship strained?
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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
The point is that previous accountant does not provided me additional information, for the client either. He does not replay to my emails, when i call to him he says that he provided everything, but all i have is this trial balance, i attached it to my post. Accounts were made by using program TAX CALC. As it is on the TB, only not clear account for taxes liability for me was that other taxes and social security, but this one suppose to be liabilities concerned with PAYE and NI contributions (2005.56), as company did not make payments for a while. The VAT reclaimed on purchases for the quarter 31/05 - 31/07 was over 8000 £. So I suppose on the trial balance there should be Purchase and Sales control accounts or debit VAT liability account as it is a refund for the 31/07 date. Maybe I do not understand this TAX CALC nominal codes and it will sound stupid, but may be the VAT is not shown separate and is included in for example packaging costs or other purchases in this trial balance???
What other suggestions would you have, because i do not have hope that i will get additional information from the previous accountant.
Hi Roma URGENT - please remove Trial balance from your post. It has the client name on.
Feel free to re-post once you have lost any indentifying info.
I will try to have a look at it later when I am back at home. Just as an aside - if you have ONLY the Trial Balance then you do not have it all as their should be eg Fixed Asset register/something to show FA and depreciation percentages etc. Has the client paid all of the invoices to this Accountant or is there another reason why he doesnt want to help you with this?
-- Edited by Cheshire on Tuesday 10th of November 2015 10:57:40 AM
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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 attached know balance without identifying info. I would really be grateful if you could look at this. I do not know the exact reasons why he changed the accountant, but he does not seems to be very helpful. I am still trying to contact him time after time and hopefully he will provide me additional information, including depreciation percentages, etc.
Joanne is best placed to help you with this, but just a thought.
Did the company use any in-house bookkeeping software or was all paperwork just given to the accountant? If the former then could you not complete the vat process to transfer the VAT outputs and inputs to 2202 as per Vince's advice above?
Another thought, does he now have a new accountant or are you doing it? If new accountant it may be best conversing with them, as presumably they will have done the professional clearance, and be able to get the info you need. If it's you, did you go send the proffessional clearance letter first?
-- Edited by Leger on Tuesday 10th of November 2015 01:21:49 PM
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Joanne is best placed to help you with this, but just a thought. Too kind John and actually not the case in this instance!
Did the company use any in-house bookkeeping software or was all paperwork just given to the accountant? Good point - worth checking? If the former then could you not complete the vat process to transfer the VAT outputs and inputs to 2202 as per Vince's advice above? I think the posts are getting a bit confusing here as we are all advising what would be done in sage as this was mentioned earlier on, but the issue stems from use of TalxCalc (see below)
Another thought, does he now have a new accountant or are you doing it? If new accountant it may be best conversing with them, as presumably they will have done the professional clearance, and be able to get the info you need. If it's you, did you go send the proffessional clearance letter first?
-- Edited by Leger on Tuesday 10th of November 2015 01:21:49 PM
Hi Roma
You mentioned the previous Accountant has used TaxCalc but has he used this to prepare everything or just to import the information from another package. Worth a check with your client, as John suggests.
Normally the VAT liability would sit at nominal 5300 in taxcalc but this is clearly missing from the list you now have, which is odd as even with a refund I would expect the figure to show in that pot or somewhere else on this list. There are quite a few assumptions that could be made as to why it isnt but only ones worth a check at this stage - has it been dumped to other taxes/social security by mistake? You should be able to do a quick rec of this figure from the clients position with HMRC online perhaps? Plus have you managed to reconcile the trade debtors/creditors and Bank? (Wondering if for some bizarre reason the item was keyed as a Bank receipt at year end to clear the VAT nominal, even though it hadnt actually been received at that point. Seen stranger things happen!!)
Other than that I think the only way you are going to sort this is by getting the Accountant to co-operate more with either you or your client. Are you his bookkeeper or Accountant? John has made some very valid points about professional clearance and I alluded to finding out exactly why your client has moved, because if things have not been done in a professional manner then I wouldnt be surprised by the Accountants response now. But if this can be smoothed over then you should be able to get some more information.
Sorry I cant help more. Perhaps someone with more experience than me can help you on here?????
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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
Actually, I sent the professional clearance letter to the previous accountant and then few more letters by email asking to provide me additional information: list of trade debtors and creditors and other information, fixed asset register, etc. As my client paid all the invoices to him, but he did not get well with him and i don't know reasons why...i have lost hope he will provide any additional information. I am the beginner bookkeeper and do not have more experienced specialist on a side to advice me...
From this trial balance and documents the client provided to me I have already figured out trade creditors, as they stand on the debit side because the payments were made in advance (payments were made in July, invoices issued in August), figured out other taxes and social security, as I compared submitted Payroll data to HMRC. The only thing I did not figure out is Trade debtors account, as the client said that on the 31/07 all the clients were paid to him, but account shows 1425.98 debit balance, so I am considering may be this purchase VAT could be under this account.
