So far I’ve uploaded four quarterly VAT returns via quickfile and my company is registered on the flat rate scheme. My query is in relation to how to post the correct journal or entry so that the retained difference of the VAT collected per quarter and the amount paid to Customs & Excise can be included in my profit and loss reports. So for example in one quarter my gross turnover was £12,335.64 (net £10,279.20) and the amount remitted under the flat rate scheme was £1655.31, how i do account for the £400.63 retained…? Thanks in advance! Michael
This should happen automatically if you have configured the flat rate option in your QuickFile VAT settings - when you complete the VAT return in flat rate mode QuickFile puts your VAT-inclusive flat rate turnover in box 6 and calculates the appropriate value for box 1 from the flat rate percentage. The journal it creates will debit the collected sales VAT on the relevant invoices from the control account, credit the calculated FR box 1 value to the vat liability account, and put the difference on the “flat rate sales adjustment” nominal to make the journal balance. This last one is a P&L nominal in the sales section, so it will be added to the net “general sales” to give your total turnover.
P.S. this forum is about QuickFile, not quickbooks
Thank you - i;ve looked again at my VAT returns and I think i may have picked up where i;ve gone. Am i correct in thinking box 1 and 3 should be for the total VAT charged for the period and at that point the quickfile software picks up the difference in box 5 (VAT passed paid to C&E) and takes into account the gross turnover in box 6 and posts the relevant journal on the system?
box 6 is your total sales for the quarter including the VAT you charged to your customers
box 1 is that box 6 number multiplied by your flat rate percentage
(these two may include other transactions within the quarter that are not accounted for under flat rate, such as reverse charge transactions; if you have any of those then the 6-to-1 ratio may not exactly match your FR percentage)
box 2 will be zero unless you’re in Northern Ireland and bringing in goods from the EU
box 3 = box 1 + box 2 (so usually equal to box 1)
box 4 is generally zero, unless you’re reclaiming VAT paid on specific capital purchases
box 5 is the difference between 3 and 4 in the usual way
The difference between the VAT you charged your customers and the VAT you declared to HMRC doesn’t appear on the return itself at all, it is factored in to the journal that QuickFile creates when you submit the return. For the sake of argument, suppose you made one sale in the quarter for £1000+20% VAT, your flat rate was 14%, and there’s no other complications like reverse charges or capital goods. Then:
the original invoice will put £1000 credit on general sales, and £200 credit on the sales tax control account
the VAT return would show £1200 in box 6, £168 (14% of 1200) in boxes 1, 3 and 5, and zero in all the other boxes
the VAT journal created by QuickFile (dated on the last day of the relevant VAT quarter) would be
sales tax control: debit £200 (reversing the VAT charged on the invoice(s) that this return is reporting)
VAT liability: credit £168 (the FR calculation)
flat rate sales adjustment: credit £32 (the difference, to make the journal balance)
and after submitting the return your P&L would show £1000 on general sales, £32 on flat rate sales adjustment, and therefore £1032 as the total of the turnover section - this is equal to the difference between the £1200 (inc VAT) that you charged the customer and the £168 you need to pay to HMRC.