Hi everyone,
I'm just after a bit of advice please as I've gone a bit rusty from my processing days.
Subcontractors send an invoice. Posting into sage are they TO exempt or T9 non vatable.
I've started working for a company All postings are either t1 or T9 which is obviously bonkers!!!
Don't even get me started on how they've been posting the invoices on the value minus tax and not putting the tax liability entries on!!!
Thanks all
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Em
MAAT, CIMA student, avoider of Tax as much as possible and going greyer by the day.
I'd go T9 on this one, unless the subby is VAT registered. Incidentally T0 is zero rated, not exempt. T2 is exempt.
When I first got involved in bookkeeping back in 2006, we just used T9 and T1 as well, and our accountant never batted an eyelid. It was only after becoming self employed that I discovered there was a bit more to it.
-- Edited by Leger on Friday 10th of November 2017 06:43:40 PM
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Ooooo now John - Im going to disagree and that doesnt happen often does it!!
I agree that T0 is not exempt and that as you say is T2 (and also used for such as insurance)
You dont say which VAT scheme they are on Em so I will assume its standard (different rules for the special schemes may apply so worth looking at each individually as required), so the general guidance is that you show the TOTAL value of purchases and expenses (excl VAT) # except such as PAYE contribtions, wages, Directors/other loans, cash and a few other bits.
So # would include the invoices from your suppliers whether VAT registered or not, including such subbies. So these are keyed as T0.
The exceptions mentioned are keyed at T9.
Of course some of the subbies may be VAT reg in which case they are T1.
Sounds like you are going to have fun Em!!
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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
Ooooo now John - Im going to disagree and that doesnt happen often does it!!
I agree that T0 is not exempt and that as you say is T2 (and also used for such as insurance)
You dont say which VAT scheme they are on Em so I will assume its standard (different rules for the special schemes may apply so worth looking at each individually as required), so the general guidance is that you show the TOTAL value of purchases and expenses (excl VAT) # except such as PAYE contribtions, wages, Directors/other loans, cash and a few other bits.
So # would include the invoices from your suppliers whether VAT registered or not, including such subbies. So these are keyed as T0.
The exceptions mentioned are keyed at T9.
Of course some of the subbies may be VAT reg in which case they are T1.
Sounds like you are going to have fun Em!!
Oh heck, now I'm in trouble
Why T0 over T9? T0 as I understand it is for zero rated supplies, so that would be things like food, children clothing, books etc. Wouldn't a person not registered for VAT be outside the scope?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
sage's own help screens (copy enclosed as its buried in a link).
Its a statistical box appearance on the VAT and probably not quite as key to them as box 6 (which they still use to do quick checks and will phone you if it looks awry!).
Lots of arguments for and against, many even played out of HMRCs own website.
Lots of arguments for and against, many even played out of HMRCs own website.
Oh I agree. I did a bit of research to make sure I was right and found lots of different opinions.
Just out of curiosity what do you make of VAT 700 VAT guide paragraph 3.2 ""Supplies are outside the scope of the tax if they are: made by someone who is not a taxable person"
I can see the sense in it being T0 (or as some say T1 with no VAT, which technically is more accurate but doesn't make an apers difference to the VAT return (although it will do when MTD comes into play)
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Someone who simply isn't VAT registered doesn't mean they are "Not a taxable person" - it just means they aren't registered to collect that particular form of taxation on behalf of El Gov.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Oh if only I had time for such a debate (which I would if I wasnt dealing with numpties who cannot be arsed responding, but thats for the 'FFS' thread! Although Im desperately trying to stay more zen like!)
Sticking to the VAT guide I mentioned, it doesnt actually state that you cannot report 'outside the scope' items. Well it does but only as per the final line of the extract of the whole section re box 7. Such income not a consideration of supply is eg deposits taken for hiring a car (dont create a tax point when taken, unlike say deposits for a new bathroom). I cant see a mention of 'out of scope' for purchases being on the exempt list below.
Extract from HMRC 3.8 Filling in box 7 Box 7 the total value of purchases and all other inputs excluding any VAT Show the total value of your purchases and expenses but leave out any VAT.
You must include the value of:
imports acquisitions from VAT-registered suppliers in other EC member states (that is any figure entered in box 9) reverse charge transactions (see paragraph 4.6) However, you do not include the value of any of the following:
wages and salaries PAYE and National Insurance contributions money taken out of the business by you loans, dividends, and gifts of money insurance claims Stock Exchange dealings (unless you are a financial institution) MOT certificates motor vehicle licence duty local authority rates income which is outside the scope of VAT because it is not consideration for a supply
Never mind MTD, well ok its connected, but wait until the news re the possible lowering of the VAT threshold gets out to all those small business owners, as so far it doesnt seem to have filtered through - so thought I would shove it on here for all those freeloading business owners who wander into this site!
-- Edited by Cheshire on Monday 13th of November 2017 12:58:49 PM
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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
Never mind MTD, well ok its connected, but wait until the news re the possible lowering of the VAT threshold gets out to all those small business owners, as so far it doesnt seem to have filtered through - so thought I would shove it on here for all those freeloading business owners who wander into this site!
Ah yes, I read something about this yesterday afternoon. Apparently we have one of the highest thresholds in Europe, so it's obvious that the Chancellor has stacks of room to play here. Whats been mooted I understand is a reduction of 10k a year, and reducing it down to below 30k eventually. It's certainly one way to head us into recession methinks.
VinceH wrote:
Someone who simply isn't VAT registered doesn't mean they are "Not a taxable person" - it just means they aren't registered to collect that particular form of taxation on behalf of El Gov
Well that was straight from the horses mouth so to speak. Of course HMRC have been known to be wrong!
Taken from here http://forum.bookkeepers.network/t28134038/vat-code-t0-and-t9/ post by Nicola27 about half way down. Quite a good debate that as well.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
