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cossyuk
March 31, 2020
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VAT Logging Queries

  • March 31, 2020
  • 1 reply
  • 0 views

Hi,

 

Not sure if anyone can help with this.

 

I switched over to using QBO for my business on 1st April 2019 for MTD, however this was midway through a VAT period.

 

VAT periods are;

 

Feb/Mar/Apr

May/Jun/Jul

Aug/Sep/Oct

Nov/Dec/Jan

 

I set the VAT start date to May as this was the next full period, and manually sent in the VAT for Feb/Mar/Apr the old fashioned way taking the data from Feb and March from my old spreadsheet and using QB to get the information needed for April.

 

However when the direct debit payment came out of my bank in June, there was no VAT return to match the payment to. I manually assigned the payment to VAT suspense as this is where the other payments get logged to and then at the time thought nothing more of it.

 

I am just looking at various reports for end of year as it's coming up soon and noticed that the balance sheet has incorrect figures for VAT in liabilities.

 

Firstly, because of this payment that I have logged into VAT suspense, the suspense is showing negative by that amount. Has anyone come across this issue in the past? And if so, how am I best to log this payment?

 

Secondly, I noticed that the VAT control figure is higher than I thought it should be. I checked my tax overview to see if the figures matched and they don't? My business is cash based and I have set it up as cash based on QBO. The running total of VAT shown in the tax overview is correct based on payments received and expenses paid and until now I have never looked in depth at the VAT reports in the chart of accounts. It seems that the VAT control account is being run on an accrual basis and not cash basis? Has anyone else come across this?

 

Many thanks in advance for any help!

Best answer by emmam6

I appreciate you for performing the recommended solutions and providing us a screenshot, cossyuk.

 

If you record the payment you've made to HMRC for the VAT Return filed outside of QuickBooks, you can create an Expense account. The expense transaction will be posted in the Profit and Loss report under the Expenses category. 

 

To create an Expense account, here's what you'll need to do:

  1. Go to Accounting from the left navigation menu.
  2. Tap the New button at the upper right hand.
  3. Choose Expenses for the Account Type, then select Taxes Paid for the Detail Type.
  4. Enter a Name for this account.
  5. Tick Save and Close.

Here's how you can create an expense transaction:

  1. Click the Plus (+) icon at the top.
  2. Choose Expenses.
  3. Enter the necessary information.
  4. In the Category details section, select the Taxes Paid account for the Category, Description, Amount, then select No VAT for the VAT column.
  5. Tap Save and close.

Then for the VAT invoices not logging into the VAT Control account, I'd suggest contacting our Customer Support Team. They'll pull up your account in a secure environment and investigate what's causing this issue.

 

You can either sign up for our callback process or chat directly with a support agent. Here’s how:

 

  1. Go to Help at the top.
  2. Tick the Contact Us link.
  3. In the What can we help you with? window, enter contact support in the field box.
  4. In the Choose a way to connect with us section, select Chat or Get a callback.

I have a link here that provides you with articles about managing VAT: https://quickbooks.intuit.com/learn-support/vat/misc/02/uk-vat?label=QuickBooks%20Online.

 

I'm just one reply away if you need a hand with running VAT reports or any QBO related. Wishing you and your business continued success. Take care always.


Hello Community Users, we just wanted to pop into this thread and add an update. The user who posted about the VAT reporting incorrectly contacted our support team and upon doing a screen share we were able to see the report they were running was set to accrual. When it was changed to cash accounting method the report showed as it was supposed to and hence the issue was resolved.

Any users with a similar issue please feel free to add comments below and we'll be happy to help you.

1 reply

IntuitLily
IntuitLily
March 31, 2020

Welcome to the Community space, @cossyuk.

 

I have some information to help you figure this out. 

 

You'll need to review the transactions presented on your VAT Control account. Once you've marked them as filed, the amounts will be transferred in VAT Suspense. 

 

Next, when you run the report, be sure to only select the dates that have already been filed. Those periods that weren't filed won't be reported to your VAT Suspense liability. Also, run a VAT Exception report as this may also cause the imbalance in both accounts.

 

It's also possible that the figure is higher than it should be because of the accounting method used. 

 

You can check this out and get back to me if you have follow-up questions. I'll be around to help. Wishing you a safe and productive rest of your week.

C
cossyukAuthor
April 1, 2020

Hi,

 

Thank you for your response.

 

Looking at what you have said, the transactions present in the VAT Control account in terms of decrease are fine, it is logging expenses as they are being paid. However in terms of increase, it is automatically logging the VAT from every invoice created as it is being created (accrual), rather than only logging the VAT when the invoice is paid (cash).

 

In the tax section, the amount showed for collected on sales is correct and matches only what has been paid over to me in the period, and the amount showed for paid on purchases is also correct.

 

As you stated, when I do file the VAT return, the final amount for the period gets moved from VAT Control to VAT Suspense, the VAT Suspense then gets balanced when the direct debit payment is made to HMRC. But VAT Control is never showing the correct figure as it is treating increases on an accrual basis whereas the rest of quickbooks is processing everything as cash basis.

P
payment after leaving
April 1, 2020

Hi cossyuk

 

Do you have the taxes settings set to cash as well as within the account and settings > advanced section?

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