Skip to main content
C
Courtney-Acc
January 23, 2025
Question

HMRC Payment on Account

  • January 23, 2025
  • 1 reply
  • 0 views

Hoping someone can help as I cant work this out.

I have a client who pays HMRC monthly a payment on account. These monthly payments are entered as an expense to taxes prepaid, under prepayments.

My question is how do i move these payments from prepayments to the Vat quarter it needs to be allocated against. I dont want to just delete them and re-enter them in the taxes record payment if there is another way.

I have tried to journal them to the correct tax account but it doesnt allocate correctly and the vat balance still shows that same amount as owing. 

1 reply

J
JorgetteG
January 23, 2025

I comprehend dealing with VAT adjustments can be challenging, especially when the numbers aren't lining up as expected. I’m here to help you navigate this process and ensure we address every detail, Courtney.

 

Using the Journal Entry feature in QuickBooks is a practical way to move monthly payments into the corresponding VAT quarter without the need to delete and re-enter them. This method allows you to reclassify prepayments from the expense account to the correct VAT liability account for each quarter, ensuring your VAT balances remain accurate.

 

However, if you’ve already attempted to journal the entries to the correct tax account and the VAT balance still shows as owing, we can explore this further together. Here are some specific areas we should focus on:

 

  1. Correct Journal Entry Details: Verify the details in your journal entry are precise. Check the accounts, amounts, and dates entered, ensuring you are debiting and crediting the correct accounts aligned with the appropriate VAT quarter dates.
  2. Review VAT Settings: Examine the VAT settings within QuickBooks Online. Ensure transactions are tagged correctly for VAT and the applicable VAT rates are accurate. Incorrect settings or mappings can lead to discrepancies.
  3. Previous VAT Returns: Investigate whether the VAT returns for earlier periods have been finalized and submitted while prepayments were still recorded under expenses. Once a VAT return is filed, the amounts are locked for that period, and journal entries affecting those periods may not alter the VAT balance as anticipated. Generating a VAT Summary report can help you understand the components of your VAT liabilities and receivables.
  4. Data Entry Errors: Look for any data entry mistakes or duplications that could cause the balance to appear incorrect. Double-check all relevant entries for potential inaccuracies.

 

Nevertheless, since VAT can be complex and discrepancies can have several ramifications, you might benefit from consulting a professional accountant or a tax professional specializing in VAT. They can offer a more thorough review and provide specific advice tailored to your situation.

 

Additionally, to help you manage VAT in QuickBooks, here are some helpful articles:

 

 

Accurate VAT entry management is essential. By following these steps, you can effectively resolve any issues related to VAT allocation. Please keep me updated on your progress, and feel free to reach out if you have further questions. Wishing you successful financial adjustments.

C
Courtney-AccAuthor
January 24, 2025

So I tried again to do a journal from the taxes prepaid to the Vat suspense account as this should work. 

It does to some extent as on chart of accounts,  taxes prepaid shows the transfer and vat suspense is zero. The issue that remains is on the Vat screen as it still shows this amount as outstanding. I have found a work around and journalled it to a bank account and then recorded the payment through the Vat screen. 

Unless you have any other ideas.

M
Maybelle_S
January 24, 2025

Let's work together to fix this VAT issue, Courtney.

 

To fix this, let's double-check the journal entry. Ensure the debit and credit accounts are correct. The debit should be in the appropriate VAT liability account. Then, confirm that the journal entry amount matches the outstanding VAT amount.

 

Also, ensure that the "Taxes Prepaid" account is correctly mapped to the relevant VAT code in QuickBooks Online. Incorrect mapping can lead to discrepancies.

 

If the issue persists, I suggest contacting our Customer Support Team. They have access to specialized tools and expertise to diagnose and resolve complex accounting issues. They can help you identify the root cause of the problem and provide tailored guidance.

 

Let me know if you have other questions or need additional help with your VAT. I want to ensure everything is taken care of for you.

Terms & ConditionsAccessibility statement