I registered for VAT, Cash basis from 11/11/14. I’ve received payment for invoices raised before registration (which obviously had no VAT on them) but the draft VAT return has me paying VAT on these. Surely this can’t be right.
Do I adjust the VAT amount, the sales amount or both to correct this? Or is this an error with Quickfile?
For your initial return you would need to adjust out those amounts relating to invoices raised pre-VAT registration but paid within the VAT period.
With Cash Accounting VAT is calculated at the point of payment and with Flat Rate your FR percentage is applied to the cash-based turnover. You will only need to make these adjustments for your first return.
Great, thanks Glenn.
I assume I can only adjust out at a top level not at an invoice/supplier level (BOX 6 and BOX 1)
Yes I believe that is correct… you’re adjusting the flat rate turnover (box 6) and the VAT due (box 1).