We have reached the end of our first year on Flat Rate VAT and so no longer qualify for the first year 1% discount. Unfortunately, the change of rate is due to occur in the middle of a VAT accounting period, and I realise that QuickFile only supports a single rate within each period. Is there a recommended workaround to this problem? I imagine it involves a manual adjustment to the ‘split’ VAT return, and maybe some corresponding changes within QuickFile (unless the two are tied somehow?). I came across some old posts by chance. In particular, this one: Flat Rate VAT change during a reporting period and filing a return and, while it looks like it would work in principle, I’m guessing HMRC and QuickFile have both made numerous changes since 2014-17 and it may no longer be valid. If anyone has some recent experience of this I would be very grateful to hear about it.
I should add that I’ve tried to follow the recommendation in that old post: “…you’d need to set the dates for the first 2 months in the period and commit the return (without submitting to HMRC). Then change the FR VAT % in your VAT settings and commit another return for the remaining month …” but it seems the dates for the return are fixed and can’t be modified, meaning this can’t be achieved. So it looks like I will have to manually calculate the VAT due and modify the return. My only concern there is that QuickFile won’t make the correct background adjustments due to the manually altered figures. Anybody know?
Hello @The_Toaster
It is a manual process unfortunately. You would have to download a CSV of the transactions, calculate it and do an adjustment to the return. The flat rate is applied to the whole period automatically, there is no way to split it.
Thanks, Steve. That doesn’t look too difficult. I can certainly calculate the VAT due manually. Will I need to also make an adjustment to the QuickFile journals (2202, 2200 and 4999), or do those figures get read directly from the numbers in the return itself?
Manual adjustments that affect box 1 get put on a separate “manual adjustments” nominal code in the VAT journal, you’ll then need to journal it from there to the usual “flat rate adjustment” nominal 4999. The VAT liability account will be correct, using the final figure after your adjustments.
Ah, I see! Nominal 2204 needs manual intervention to zero it, but the rest is handled by the automatic VATJOURNAL_xxxxxx process. I think I’ve got it now. Thanks, Ian.
Correct, the system doesn’t try to second-guess why you made the adjustments, it’s up to you to tell it with an extra journal. In your case it’s a straightforward two line journal to 4999 but when I first registered for VAT I had a load of manual adjustments for reclaiming VAT on pre-registration asset purchases where I had to split the adjustment across all the different asset codes (I’d originally recognised each asset’s starting value as its inc-VAT cost, reclaiming the VAT meant adjusting the asset values to their ex-VAT cost instead).
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