Beginner's dumb question - purchases for VAT reclaim

Moving over here from FreeAgent. My question is about recording purchases so they will be entered correctly on my VAT form. QuickFile seems to want me to create specific suppliers for every little thing I purchase, eg “Waitrose” for a newspaper, and generate an invoice for it. Have I misunderstood? I don’t buy in a lot of stuff or services, but I make purchases that are subject to VAT and I need to reclaim the VAT on them. Do I really have to create a supplier for every little thing, and generate an invoice for every little thing? I don’t invoice Waitrose for a newspaper. I don’t invoice Amazon for stationery. I’m clearly a bit confused, can anyone help me out? I didn’t have to go through any of this with Freeagent, there was just a one-step process where you identified if a bank entry was subject to VAT and if so, at what rate. That was it. Thanks!

You do have to have things recorded as “purchases” in QuickFile for it to pick up the VAT but you don’t necessarily have to set up a specific supplier for every little thing - in the same way as you can use a generic “client” for all your retail sales (where you’re charging vat but not issuing a QuickFile vat invoice), you could create a generic supplier for “sundry expenses”.

Personally I do create proper records for each purchase but most of the time I don’t fill in the full details, I just create the minimal supplier record (just the name) on the fly as part of the tagging process from bank account transactions or receipt hub files.

If you were the have a vat enquiry and hmrc asked to see the list of suppliers who you’ve recovered vat from. What would you show them? A list of suppliers they can easily identify as being vat registered or one single supplier you’ve just grouped random purchases to? May be a long winded exercise but it’s better than having a 5 hour inspection going through every single receipt to total up the vat claimed.

Ok so if I buy a pen from Waitrose or a cable from Tesco I have to set up suppliers called “Waitrose” and “Tesco” for every little thing? I never had to do that on FreeAgent!

And a further point - what does it meant when it says “this payment has not yet been allocated to any invoice”? Does “invoice” in this case mean “receipt”? I invoice someone if they owe me money, not if I’ve bought some supplies off them - if I buy a ream of paper from Amazon I get a receipt from Amazon, not an invoice?? It’s all really confusing.

Yes, it’s a purchase invoice, NOT a sales invoice, but basically a receipt.

One thing to note, you need a receipt for every business expense you claim on, it can be on paper, like a till receipt, or digital like a PDF file.

You can scan, photo and upload receipts, which quickfile will auto generate a purchase invoice for, when tagging. The digital receipt will be tagged to this purchase invoice. It’s basically a way of recording expenses.

Not sure on how freeagent did this, but I know when I used quickbooks, you had to enter each supplier also.

You can generate a generic supplier, but not really recommended, as it could get very confusing, though for small items like a pen, or a ream of paper should be okay. You could call it, general expenses £10 and less.

Not recommended though if you are vat registered, as you will need every vat receipt and the supplier, and their vat number.

So you say Tesco, this can cover all tesco stores you buy from, not just one.

In general, you should always be able to prove your accounts, and each and every expense you claim for, on inspection. So the more detailed the better.

This doesn’t seem right, a money out transaction, is exactly that, it does not prove it was a business expense, nor that any vat is applicable.

You must have a valid vat receipt to reclaim vat, either detailed or if under £250 can be simplified or modified, in paper or digital form.

Hi @mikejohnson

Welcome to QuickFile!

Just to touch on your point regarding Amazon receipts, as @Eddie_B mentioned you would need a valid VAT receipt or VAT invoice from the supplier to claim the VAT back.

Amazon does actually produce the VAT invoice for you. If you view your orders, you will find an option for “Invoice” in the top right corner:
image

This will produce a VAT invoice for you, similar to this:

Thanks everyone, it’s slowly becoming clearer. I appreciate I need receipts with VAT numbers on to claim back VAT, I’ve been doing this for 15 years through my old limited company which I’ve now closed down. It’s just QuickFile’s terminology that has confused me. I also keep paper records outside of Eg QuickFile where all the receipts are numbered and relate back to a spreadsheet. I guess all of this is for if
you want to ONLY use QF for everything. I just want to make sure my digital VAT submission is accurate!

Its not confusing at all really. If you issue an invoice to someone, what do they call your invoice? a receipt? Receipt simply means, something your in receipt of.

If you pay for something in a shop, what do you call the bit of paper the shop assistant gives you at the end? An invoice?

No I call it a receipt. Because I’m the one in receipt of it. Which is what I said.

Well that’s great, my confusion was over how QuickFile seems to differ from both of us and describe it as an invoice.

I’m not sure what the difference would be. You’d have to download and tally all the receipts anyway so what difference would it make which supplier they were assigned to?

When it feels like it that is, I’ve had mixed results with getting VAT receipts from Amazon!

No, you don’t. I have several miscellaneous suppliers for stuff like this. If I have to grab some batteries from Asda for a job it goes to the “miscellaneous materials” supplier. If I grab a box of paper for the printer from a random Amazon seller it goes down as a purchase from “miscellaneous office” etc.

Even if I do add a supplier it is literally just a name. I do all my purchase invoices from the receipt hub, if I have a purchase from a new supplier I just type the name in the box and it gets added to the supplier list ready for reuse again next time. You do not have to go through the purchase menu and add suppliers for everyone you buy something from. Of course, if you are doing it via the receipt hub as it is such a trivial issue you could easily add Waitrose and Tesco as suppliers. The only reason I didn’t is I don’t need a thousand random one off suppliers who I will never buy from again (random local shops when working away, eBay and amazon sellers etc). I started doing it this way but my supplier list got quite bloated unnecessarily.

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