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Logging purchases and VAT

#1

We make a lot of purchases (VAT and using a credit card. These are all logged on Dashboard > Credit card.
Do I also have to enter each purchase at Dashboard > Log a purchase? I am also wondering whether when I go MTD, i.e. VAT that I am doing the right things to ensure the figures will be accurate

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#2

Each purchase needs to be recorded as a purchase invoice but there’s several ways to go about it. If you’re starting from a bank statement view (such as the credit card account) then when you tag something as “payment to a supplier” there’s the option to create the purchase record at the point of tagging. Alternatively you can create purchases by hand or through the receipt hub when you upload scanned or email receipts, then just use the bank tagging to assign payments to the existing purchases.

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#3

Thanks for this, but has been helpful.

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#4

Hi, can some advise if I need to select 20%, 5% or no vat when allocating a payment on account to a supplier. I tend to allocate payments to the supplier record before I know which vat rate applies.

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#5

I always allocate these with the VAT rate that I would generally expect the invoices from that supplier to me to be, which is always 20% in my case. However, this is because generally all my prepayments/payments on account are just payments for multiple invoices. There are a few things to take into account, like the date of the invoices that you are paying against. In my case I am always paying on account but am actually paying for invoices incurred in the previous month that have not been entered/received/allocated.

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#6

This only matters (1) if you’re on cash accounting and (2) the payment is still not tagged to a purchase by the time you do your vat return for the relevant quarter. If it has been assigned by that point then it’ll take the vat rate from the purchase(s) to which it was assigned, if it hasn’t been assigned then I understand it is treated as the rate you originally picked for the purpose of this return but then adjusted automatically in the following return if it eventually ends up attached to a purchase at a different rate.

QuickFile staff can confirm this fir definite - I use accrual accounting so I’m not 100% sure how it works on cash.

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#7

I agree with what you have said. If cash accounting then its the date the cash arrived rather than the date of the invoice. So if you are accrual based then it won’t be a problem to leave the purchase un-tagged until the invoice comes through.

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