As a self-employed courier I receive weekly self billed invoices which include a charge of £24 including VAT.
I have set up a virtual account which I transfer that charge to which then leaves the sales invoice matching the amount of money paid in the bank, all seems well there.
I then create weekly purchase invoices for £24 to the same company and pay them invoices from the virtual account, which then leaves the virtual account showing £0.00.
My question is:
Instead of billing weekly could I just do one purchase invoice quarterly (13×24 = £312)? this would mean only 4 purchase invoices a year as opposed to 52 which would make it easier for me to monitor.
You are always best trying to replicate what is happening in real life.
I would not recommend doing it quarterly as with the introduction of MTD Vat returns, some items would fall into the wrong periods. You could do it weekly or monthly
Could you not set up a bank tagging rule to create the Purchase invoice?
Enter or import 4 entries at a time on the bank and just confirm them
I am aware of the introduction of MTD for VAT and I’ve taken that into consideration.
My first quarter for MDT for VAT starts on the 1st of April 2022 and my tax year also starts on the 1st of April 2022. So everything would be in its Right Place.
I realise I could do it weekly but as I have very few expenses and was just trying to keep the amount of purchase invoices down so I could keep an eye on everything at a glance.
I suppose my main concern is would it be acceptable to HMRC for me to do it this way especially when we go into MTD for income tax?