We have been using Cash Accounting since joining Quickfile three years ago. However, the Law requires us to change to Invoiced Accounting which we have done in the Accounts.
We paid invoices early etc to reduce the difference which only came to about £100 and duly accounted for in year-end 31 March 2021.
We have prepared the VAT for Quarter ending 30th June 2021 but to our surprise Quickfile ignored the start date of 1st April 2021.
It is clear from examining the individual BOXES that Quickfile has added up all the transactions since the start 3 years ago, giving an apparent and incorrect, huge VAT bill.
What can we do to correct this - in our experience once the Prepare VAT Option is taken(and obviosuly we have press this button) it is not possible to change the Submission.
Changing from one method to the other requires you to make manual adjustments with your first return as Cash locks the payments into a vat return and accrual locks the invoices. So when you are creating your first return using the new method nothing else has been locked previously.
Since we have already entered the whole of the Quarter’s transactions and have hit the Prepare VAT, surely we are completely stuck and unfortunately with only 6 days to go before we have HMRC breaing down our neck.
I am afraid I just do not begin to understand the articles you suggested reading
Frankly would it be easier to start again? If we enter all the balances as a New Company from 1st April 2021, take the Accrual VAT option and then add all the transactions in the Quarter.
With respect. It would be easier if you consulted an accountant. If your not understanding the above articles then it’s likely you won’t be able to achieve what you want in the correct manner.
Changing from one method to the other isn’t straight forward, you will have to do some calculations to make adjustments to the first return in the new method. Going forward it will be ok - as @Paul_Courtier mentioned you may be best to seek advise from an accountant to make sure that your first return using the new method is 100% accurate.
In Vat settings Change the start date to the date of your cash accrual change over. That’ll stop it bringing in old invoices/sales. Remember to do a manual adjustment for any transactions not brought over…
That shouldn’t make any difference as the VAT return will bring in any old invoices which haven’t been included in a previous VAT return, i.e. all of them.
When you change schemes, unfortunately there is no getting around manual adjustments on your first return. You cannot just start up a new company in Quickfile and do it that way.
If you really don’t understand what needs to be done, then you need to contact an accountant and ask them for help.
It will only bring in previous invoices back to the “VAT start date” in the QuickFile settings, but you’d still have to make manual adjustments to account for anything paid in advance.
Thinking about it actually the simplest thing may be to leave the VAT start date unchanged, prepare the first accrual VAT return and then manually adjust it to subtract from every box the sum total of that box value on all the previous cash accounting VAT returns you have submitted.
the initial figures on the first accrual return would include all invoices and purchases, paid or unpaid, dating back to your start date
your previous cash accounting returns cover all of those invoices that were paid up to the end of your previous quarter, plus any pre-payments made in the previous quarter for invoices not raised until this quarter.
The difference between the two should be exactly what you need for your first accrual return to line up
every invoice raised during this quarter
plus any invoices raised last quarter (or earlier) but not declared under cash accounting because they were not paid by the start of this quarter
minus anything raised this quarter but already declared under cash accounting because it was paid in advance.
@cbstephensaca you’re an accountant, does that sound correct or am I missing something obvious? I guess it wouldn’t work 100% if you’ve previously made manual adjustments to any of your cash accounting returns, but in that case would it work to download the backing reports from the previous returns and subtract not the actual box value that was sent to HMRC, but rather the original box value that was calculated by QuickFile before you adjusted it?
The only difficulty I can see with that approach @ian_roberts is if there were payments made in advance, which still haven’t been invoiced this quarter (or invoices haven’t yet been received). They would need to be left and adjusted when the invoices are actually raised/received as that’s when the VAT return will pick them up.
If you’re happy that this doesn’t apply to you @scipio then yes, that approach seems to do the trick.
I refer to earlier replies on this topic started by me. Unfortunately, I missed the cut-off date by 19minutues and hence have to create a new topic.
Thanks for the answers to my problem. Once I got down to it and created an Excel sheet etc it was fairly simple to make adjustments to each of the Boxes in the Vat return (although the subtractions looked dauntingly huge!).
I then posted and filed the VAT return in time.
Having done this I tried to carried out the instruction to return the date to my START DATE (in my case 1/4/2021).
However, this is now impossible to achieve as I am met with the message
“VAT start date must be after period filed”.
So in my case, I believe that Quickfile will only accept 1/7/2021 as the start date.
Before I dig myself into a bigger hole, I would appreciate any assistance for the kind contributors to this Topic.
I believe you should be able to change the start date to the first day after the last filed period.
If your last VAT period ends 31/03/2021, I believe you can set the start date to 01/04/2021, so anything prior to this date is ignored.
This is where your manual adjustments will come in, as any invoices raised prior to 01/04/2021, but paid on or after, will be excluded and need to be added on manually.
Thanks - Problem is that the software is inflexible. I had already prepared the VAT return for period 1/4/21 to 30/6/2 - at that stage there is NO Going Back. With hours to go to file, I made the adjustments. So now its moved on to the next VAT.
I now have no choice but to accept 1/7/21 as start date and suspect I will have to re-do the adjustments again for new VAt period.
Anyway, come 1/10/21 everything should be sorted. Thanks for the replies. Hope others can learn from my blunders.