Total newbie here. For years we have run our accounts on a relatively simple Excel system, but going digital meant we have had to join the 21st century. Quickfile has turned out to be pretty intuitive to use, but there is one thing that I’ve not found a simple ‘how to’ for: staff expenses. Our employees submit a monthly spreadsheet with their expenses for reimbursement, which can contain a wide variety of items, from travel, subsistence, accommodation and mileage to purchases of stationery (they work remote), telephone costs, computer hardware and even external training courses or conferences. Much of this carries VAT at the standard rate, but some doesn’t (e.g. train travel and international expenditure).The expenses are coded by the employee against the correct categories, indicating where VAT was paid, and the spreadsheet works out the net expenditure and the total VAT for each month.
Simple example: train ticket £80 (no VAT), ink cartridge £24 (£20 + £4 VAT). The employee is reimbursed £104, £100 is going into the P&L and £4 is allocated to the VAT account.
I am now trying to establish what the best way is of inputting this correctly into Quickfile. When I try to do it through ‘other expenses’, Quickfile warns me “If you are VAT registered you should always post your sales and purchases to an invoice to ensure any VAT is accounted for”. But treating this as an employee invoice doesn’t seem to work - the employee is evidently not VAT registered, and not all the items are VATable - e.g. the reimbursement of £104 is not £86.67 + £17.33 VAT).
What is the best way of entering the information from the expenses claims and properly accounting for VAT?
You have to record the expenses as some sort of purchase invoice in QuickFile in order for it to include them in your VAT return. A purchase record can have multiple lines with different rates of VAT so I’d do it as one purchase per employee but with each expense itemised as a separate line, at 20% VAT if the employee submitted a valid VAT invoice or receipt from the supplier, and at “no VAT” if either the expense isn’t VATable or it is but you don’t have a valid invoice. Alternatively you could just do one line with the overall net and vat totals from the spreadsheet (the vat column is editable).
The reimbursement payment to the employee would then be tagged in QuickFile as payment of this purchase.
Ultimately if you do get a VAT inspection what they’ll care about is that you can show a VAT invoice from the supplier for every item where you’re claiming back the VAT - exactly how you record it in QuickFile isn’t crucial as long as the totals are right, you have the backing paperwork, and you’re not claiming any VAT back too early (e.g. if the monthly cycle doesn’t line up with calendar months then you might need to split the purchase records that straddle VAT quarters so everything falls in the right calendar month).
Is the best thing then to set up every employee as a supplier, and create a pro forma invoice for each one on a monthly basis to coincide with their expenses claim?
Employees do submit VAT receipts/invoices for all the VATable purchases they made. Expenses reimbursements are done monthly, so they have always been neatly coinciding with the VAT quarters.
That would probably be the easiest way to keep track of it and be able to look at all expenses for a given employee across months. Or you could keep it even simpler and just use one generic “supplier” for all employee expenses. It’s up to you really, to balance between the amount of effort to enter the expenses in QuickFile in the first place vs the ease of extracting reporting data along different axes later on.
If it were me I’d probably do one supplier for all expenses, one invoice per employee per month, but I would make each expense a separate line on the purchase so I could classify them to the appropriate nominal codes. There’s no native support in QuickFile to upload a multi-line purchase or invoice directly as CSV, sadly, but if you have any programming expertise in your company it wouldn’t be hard to make an excel macro or Google Sheets script to do it using the QuickFile API, to reduce the chance of mis-transcribing something by hand.
(In addition to the relatively intuitive and straightforward interface of Quickfile, the helpful community is a major boon!)
I’ve just been playing around with it a bit according to your earlier suggestion (one VATable expenses line item and one non-VATable expenses line item), and I like very much how QF matches payments to be tagged from the current account with the expenses purchase invoices I created. I imagine that this would not be as straightforward if I go for the single generic supplier for all employee expenses (as the various payments would not match the single invoice). I guess it might also lead to complications if some employees are late submitting their expenses etc.
The different nominal codes are currently managed on the employee expenses spreadsheet (so the coding work is done by the employees , and I am not keen on manually transferring this all. I used to be a dab hand at programming Excel but the experience is a bit rusty. For the time being we can continue doing the analysis separately using the Excel forms, but one day I will dig into the QF API and see how I can automate the transfer.
That lack of interface (for example to upload Excel-based expenses forms) is definitely a weakness of QuickFile’s, but given the 0 cost, I am not about to complain about it!
Thanks again for all your help. I am now all but ready to submit my first digital VAT return next week (once the expenses for August are in ;-))
, and I am not keen on manually transferring this all. I used to be a dab hand at programming Excel but the experience is a bit rusty. For the time being we can continue doing the analysis separately using the Excel forms, but one day I will dig into the QF API and see how I can automate the transfer.