Amazon Gift Card

Accounting
1

Hi! I’m a little stuck on how to process one purchase in my VAT return and would appreciate any guidance.

I bought some printer ink and here are the VAT invoice details:

vat_invoice

However, Amazon Business also gifted me an odd amount (don’t ask) for really messing up some previous orders, so that gift card amount was automatically taken from the total:

vat_invoice_details

Given that my final payment was £40.92, the VAT has been auto calculated @ £6.82 but how do I reconcile that with the actual VAT invoice?

Thank you! :slight_smile:

2

When you’re processing purchases whatever VAT was calculated by the supplier should always take precedence over anything calculated by QuickFile. The invoice says you were charged VAT of £11.84, so that’s the amount you are entitled to reclaim.

You could simply add an extra line to the purchase invoice for -30.13 at 0% VAT, which would show in your books as printer ink at £29.08 and VAT of £11.84.

Alternatively, and perhaps more accurately, you could split it into two:

  • Create a new nominal code from your chart of accounts in the “sales” range for suppliers goodwill payments and tick the option to also allow this code to be used on purchases.
  • Create an (unpaid) purchase for the full £59.21 + VAT £11.84 tagged to stationery (or wherever you normally put printer ink).
  • More options → credit note, and make the credit note be -£30.13 @ 0% VAT, assigned to the new suppliers goodwill code

This will leave an outstanding balance on the purchase of £40.92, for which you can record payment in the usual way. Your books will show £59.21 expense for the printer ink and £30.13 income for the goodwill payment. And the VAT return will include a total (for the purchase minus credit) of £29 in box 7 and £11.84 in box 4.

1 Like
3

Thank you so much, Ian! That’s a really helpful post, and although the second (more accurate) suggestion is probably a bit beyond me at this point, I’m going to give it a shot as it would be good to learn.

For the record, I usually tag printer ink as an IT consumable! :slight_smile:

Thank you once again!

4

Hi Ian,

Sorry to bother you again! I followed your advice and now have the following (which I think looks correct):

credit_note

The next bit is where I’m a little uncertain and would sincerely appreciate confirmation that I’m doing it correctly. In my Quickfile bank account, I still have the original purchase waiting to be tagged for the amount of £40.92 (uploaded from my bank statement) - that now obviously matches the amount of the unpaid invoice you helped me to create. So do I just tag that original entry in the following way:

tag
tag2

Thank you once again!

5

Yes, you’ve got it in one. Despite the name, the option to “pay down multiple invoices” is the one to use for any situation where you want to assign a payment that doesn’t exactly match one single invoice total. This could be one payment split across several invoices, a part-payment against a larger invoice, an overpayment where you want to use some of the payment to pay an invoice and hold the rest on account for future use, etc. etc.

1 Like
6

Thanks, Ian! Absolute star - your time spent helping me is very much appreciated.

Hope you have a great day.

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