Just filing my first VAT return since going VAT registered on 1st November, I received some late payments in the November which have been added onto the return but were obviously not liable for VAT as were from before this period.
any easy way to fix this? I cannot change the payment date as it’s all linked though bank-tagging.
Is the only way to use the adjustment column?
Hi @Ashley_Dyer
Please accept my apologies, but I’m not sure I follow the situation here.
With the payments that have come in, in November - are these tagged to invoices? If so, I’m assuming the invoices are pre-1st November and don’t have VAT on them?
Are you using cash or acrual accounting for VAT?
You can claim VAT back for a long time prior to being VAT registered. Not sure if exact length of time but it’s a decent amount of time. If the invoices are within the last year you can leave it as it is and no need to remove them.
Hi Mathew,
Yes payments are tagged to invoices - and you are correct that these were before i was liable to charge VAT and so no VAT on them but they seem to have still been pulled into the VAT return as the payments were made in November.
I am using cash accounting.
Its been pulled in to the VAT return because you are on cash accounting. The fact you are on cash accounting is exactly why its including them. Cash accounting is accounting for VAT “when” you receive a payment.
Regardless of whether the invoice was issued In October, the fact you were paid in November and on Cash Accounting, means you are charged VAT on this payment by QF.
However having said this, as you were not registered for VAT in October when the invoice was issued, providing the “supply” took place in October, and not November, you can adjust your vat return to remove the invoice which is being included (im guessing you will need to manually calculate the invoice total less VAT and adjust the net sales and Sales Vat boxes. If however you are using Making Tax Digital, then someone else will need to explain how to adjust that as im unsure.
The fact that the payments are being counted in the return will only affect box 6, they won’t add to box 1 as there was no VAT on the pre-registration invoices anyway. If you want to exclude the amounts from box 6 you can probably do that by marking the relevant invoices as out of scope but check with your accountant that this is the correct thing to do.
Thanks for your replies.
@ian_roberts The problem is that they are affecting box 6 and 1, even thought there was no VAT on the invoices, Quickfile is treating them as including VAT and adding this appropriately.
I am also using MTD and this is my first time making a VAT return and so want to ensure that everything is correct!
Are you on the flat rate scheme?
In that case you should definitely check with an accountant (I’m not one) as to the correct legal position. Under the flat rate scheme sales which would normally be zero rated still count towards your flat rate turnover, the question is whether sales invoiced before your date of registration count as zero rated sales (to which the flat rate would apply) or are out of scope entirely.
Thanks Ian,
I will give my accountant a call.
I just assumed that if i wasn’t charging VAT on these as it was before the date of registration they would be excluded… otherwise i am 14% down on 7 jobs due to late payments of invoices… hardly seems right!
The turnover to which you apply the flat rate is all that you receive including the VAT . … This method is the Flat Rate Scheme equivalent of cash accounting . It is based, not on the time you make the supply, but on the time you are paid for your goods or services
However as I have already said. You didn’t register until November and the payment relates to invoices in October. So the vat needs to be adjusted accordingly. Which your accountant will confirm.
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