I have to file a VAT return from 1 June 2019 to 30 March 2020. My flat rate changed from 13.5% (first year discount) to 14.5% on 30 January 2020. HMRC says I need to show the adjustments on the return. Do I make manual adjustments for Feb and March 2020? How do I do this?
You need to work out adjusted figures and then adjust using adjustment boxes on vat return screen, little red arrow on right side of boxes as you see in screen shot, adjust figure say 20 to increase it -20 to decrease
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Thanks - so to figure out the adjustment, I take the invoice amount including VAT and multiply by the new rate (14.5%) right? That seems to be the way the software calculates it?
Is this one return for the whole 10 months period? Anyway, if QuickFile is set up for 13.5% then it’ll calculate your liability as 13.5% of gross on all the invoices (if you’re on accrual accounting) or payments (if you’re on cash accounting) involved. So what you’ll need to do is start by preparing a return for the right period but don’t submit or save it, instead download the backing calculations (either “download calculations” at the bottom or “export” at the top, depending which version of the form your account is using), and open the CSV in Excel or similar.
Identify the invoices/payments that should be at 14.5%, total up the gross value of those, and your adjustment will be 1% of that total (the difference between the 13.5% QuickFile has calculated already and the 14.5% you need to pay).
Add that to box 1 as a manual adjustment when you submit the return, and then create another journal that moves the same amount from credit “manual adjustments” to debit “flat rate sales adjustment” (this will balance the debit to manual adjustments created when you submit the VAT return).
After you’ve submitted this return, change the flat rate percentage in your settings to 14.5% for future returns.
Thanks so much for the help. I really appreciate it.
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