Blimey it's one question after another at the moment sorry folks....
Just finished a sole traders accounts and they went over the threshold for vat last November. I know I have to register him and he will have to pay any Vat due from that date onwards but I was thinking about the additional work that is going to be involved for me. I use VT but as far as I can see I am going to have to sort all his receipts from that date (and there's hundreds of them) and amend them in VT to show the Vat is there another easier way ?.....(clutching at straws here)
I have also just realised that if I claim the vat back on his expenses it will make his profit higher and as he can't go back to his customers and ask for the Vat on his sales, in retrospect this is going to cripple him....
Georgie
-- Edited by Georgie on Monday 2nd of May 2016 08:19:50 PM
Would it be easier to dump the purchases info from Vt into excel and then manually go through the purchase invoices and receipts you have filed! marking off the relevant ones in that excel sheet to get you started?
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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
Plus the same for the sales invoices that should've had vat, once you have the registration date confirmed of course. Plus he needs to increase his invoice amount now pending receipt of VAt number, BUT he can't call it a VAT (add on) until he has and can quote the actual. VAt number.
sorry....rushing.....cooker alarm going off!!!
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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
You say that its going to criple him but he is paying VAT on this quarter where he can now reclaim VAT on pre registration purchases (for which they have VAT invoices and still have the items... even more work for you there, sorry but at least it will help offset the hit that your client is going to take).
In VT when you switch VAT on your entries will not immediately know that they are to be part of the VAT return.
You need to go through all of your sales invoices for the period and all of your purchase invoices and for each one, edit it and there will now be a little box that says within the scope of VAT. tick that and a VAT line will appear. Within that there is a Net transaction Value and next to that is a VAT amount. Adjust the VAT amount only wbih automatically adjusts the net amount.
You have a list of all of your sales invoices or Purchase invoices down the left hand side, just go down them and fix each one in the same way.
When you create your VAT return you can click on the various fields to drill down to the sales invoices and purchase invoices that created them. Scanning down the list will quickly show you any that you have missed.
Whilst this is not diffiucult, as Joanne states this is not going to be a two minute job so make sure that your client understands that this is not a freebie.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Yes, I am going to have to charge him for this extra work. His partner was completing his tax return each year but I think she realised a while ago she was in over her head , hence me getting the Job. I thought it was a pretty straight forward little job , that's why I agreed to do it.
Shamus, Thank you that will make this a lot easier. I had read I could claim for pre registration purchases , how far can I go back?...
AND that may mean he would get a refund, is this right?.?
Georgie
-- Edited by Georgie on Tuesday 3rd of May 2016 08:01:42 AM
Its four years for assets and six months for services but the emphasis is that the items must still be in the company at the date of registration, the original invoice must be available and there is a new approach from HMRC that applies wear and tear to assets which has caused a bit of a stir in the profession.
It was discussed in some depth recently in this thread : www.book-keepers.org.uk/t61588593/new-vat-registration/ which gives links to Taxation and Tax Journal articles where the issues around the changes are discussed more fully.
Yes, its very possible in some instances to end up with a refund.
HTH,
Shaun.
p.s. just read my post from last night. What on earth does wbih mean??? I'm breaking in a new keyboard and the keys are slightly larger than my last one (no, not an age thing!!!) so when I type fast my fingers are hitting the keys where they should have been on my old keyboard... Makes for some real howlers!... Note to self... Triple check emails to clients!!!!
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Not prior to pre reg - there are two key phrases in what Shaun has said:-
items must still be in the company at the date of registration - ie if he bought stock and that stock is still in the company at the date of REG, then that invoice can be used. If the stock is sold - tough!
If he bought say a PC pre reg - if he still has the PC in the company then he can claim, BUT you must apply the wear and tear approach.
Also bear in mind that first time reclaims can quite often prompt a VAT inspection.
He could be fined for registering so late.
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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
Non of them. The fuel is a consumable, it does not still exist at the time of VAT registration.
The VAT reclaimed has to have a direct effect upon post registration income. Fuel purchased pre registration relates to pre registration activities so is not claimable.
The key line is that the asset must still exist in the company at the date of registration.
So, things like items purchased and sold before registration cannot now be claimed.
At least that part is good news for your data entry as you can effectively ignore those hundreds of pre reg fuel receipts for VAT purposes.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I did point to that other thread with your W&T links. Hope that Georgie has read it as it's an important post that I'm pondering making a temporary sticky as it's a question that comes up a lot.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
All sorted, thank you Shaun! ..... Isn't VT wonderful, don't think I would have liked to have done that on Sage!... And not so bad outcome for client either.
Can I....should I?..... claim the Vat element of an order from the large DIY store amounting to £1800 (so £300 technically is the Vat) which lists the items bought, has a date and their Vat reg number on ? When I asked my client to get a Vat invoice they were told it would take 2 - 4 months ...
Seems a bit harsh seeing as they are already taking the hit on £25,000 worth of sales invoices....
Same as Johnny. But i would also be ringing the DIY store myself, get past the numpties who answer the phones and ask the question - if I got that answer then I would also be saying 'Im sure the VAT man would have something to say about that one'. Ive never had an issue getting an invoice from even the biggest of companies - in fact, usually the bigger the company the easier it is.
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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
One rule for one set of guidance and one for another - knew you would pick up on that one John! Eagle eyes.
