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K
ken-kcamarketing
November 21, 2022
Question

How do I claim VAT back from a flat rate scheme?

  • November 21, 2022
  • 1 reply
  • 0 views
I have registered for VAT and am producing my first VAT return.  I need to claim for capital spent in the previous 4 years.  I have also registered for the flat rate of VAT.
I have input the capital expenditure as Journal Entries, debiting the cash account and crediting Vat Control and Equipment.
When I run the VAT return, using the normal dates, it produces correctly, in that it only lists the income and applies the flat rate to it.
When I run it , including the dates when the capital expenditure was made, I still get the same result.  Presumably because there is no need for the expenditure to be listed, I only get the income, on which the flat rate is based.
How do I alter the VAT return in order to make the claim of the previously paid capital expenditure?

1 reply

G
GeorgiaC
November 21, 2022

Hi ken-kcamarketing, thanks for your post. You can either enter the capital expenses as an adjustment on open return, or as exceptions. As this is your first return on QB, to record exceptions, you would need to create a nil amount dummy filing for the date preceding your open return (for example, if your open return is 01/09/22 - 30/11/22, you could create a filing from 01/08/22-31/08/22). To do this, turn off MTD in QuickBooks, and then click prepare return > set the start and end dates on the following screen > mark as filed. After this, turn on MTD to allow for the new open period to sync up with HMRC. You can then add the capital expenses into QuickBooks, with the relevant date and  VAT code, and the system will then recognize and post these as exceptions against your open return. 🙂

K
ken-kcamarketingAuthor
November 21, 2022

Thanks for that Geogia,, but I'm not an accountant, more a book keeper/mathematician.

I purchased Quickbooks because I knew I needed to register for VAT this year, I've done previous VAT returns, but those were manual, which is not allowed nowadays.

I started using Quickbooks from 1/4/2022, but I've also input Journal Entries for the capital items which were bought before 1/4/2022, with an entry in VAT Control.?  And what about VAT Control, will that cancel out those entries when I get the refund?

If I make a dummy filing entry for August (the first VAT return is for 1/9/2022-31/12/2022 and due in January), will this have any effect on the other things, profit, turnover etc.?

 

What is the difference between an adjustment on open return and an exception?

 

G
GeorgiaC
November 21, 2022

The VAT control account is a default account used to track unfiled transactions with VAT - once a return has been filed, the total amount will then post to the VAT suspense account (meaning the balance of the VAT control would be zero if all current transactions were filed). We don't recommend posting to this account directly; to affect the VAT return you would need to use a VAT code, as selecting the VAT control in a journal wont populate in the return. If the dummy return is a nil filing, there will be no effect on any future returns or reports (please note that the dummy return will show in your list of filed returns on QuickBooks, and it would not be possible to remove this). 

A VAT adjustment is entered directly against the relevant box(es) on the return, instead of entering any transactions into QuickBooks. An exception is generated by entering or amending transactions dated prior to the most recently filed period with a VAT code, and will post to the relevant boxes on the return. If you need any guidance with this, we'd recommend reaching out to your bookkeeper or accountant. 🙂

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