I have an issue with my VAT return submission, we first got quickfile as we were aware tax becoming digital would be coming into play for the company, this was part way through a business year and we thought it would be good practice to retrospectively input all the accounts up to this point. This generated two VAT returns which we had already submitted to HMRC and calculated manually. However the VAT liability figure generated by quickfile is slightly lower than the figures we had already submitted to HMRC. Herein lies the issue, the next submission was to be done digitally and the difference couldn’t be simply adjusted on the VAT return on quickfile as the quickfile figures are correct for the previous VAT return submission it is only figure submitted to HMRC that is incorrect.
Our thinking is that as these submissions are saved from some time ago a Journal needs to be made to show the liability to be the figure HMRC have and then an adjustment on the next VAT return to decrease the liability to the correct figure.
I’m going to use example dates and figures here… so for the period 01-August-2018 to 31-October-2018 a VAT return was manually calculated showing a sales vat liability of £1100, this was submitted directly to HMRC and full payment made. On having entered all the invoices to quickfile retrospectively the VAT return (now saved) shows the sales vat liability as £1090. Therefore the return and payment to HMRC for that period is £10 over the quickfile sum (note the quickfile figure is the correct figure). This results in the VAT liability account being dr £10 and HMRC having the incorrect figures.
Do we journal the following:
Dr 2200 Sales Tax Control Account - £10 @ 31-October-2018
Cr 2202 Sales VAT Liability - £10 @ 31- October -2018
This will increase the VAT liability for that period but not show the calculations in the sales. It will also bring the VAT liability account back to nil.
Then in the next VAT submission to HMRC that we do ammend the figure to decrease the liability by £10 and make a note to self explaining why this has been done?
Or perhaps we are looking at this all wrong.
Any help would be much appreciated.