Migrating to Quickfile with VAT on Cash Basis

I have read your very good article http://help.quickfile.co.uk/main/1/opening_balance.htm, but it presumes that I am on VAT accrual system - but I am not. If I do as you suggest: “start from the beginning of a VAT period for a return yet to be submitted” then I will have older sales (for which I haven’t receive payment) unaccounted for. My question is what should I do to migrate? Here’s my set up:

  1. Company has been trading for several years.
  2. My current financial has started on 1st February.
  3. I invoice all my customers in arrears, so I haven’t invoiced any one this (financial) year yet. I haven’t entered any purchases either (Ionly have a handful of these every month).
  4. I am VAT registered, on cash basis (and on flat rate)
  5. My current VAT quarter started on 1st February
  6. I have 6 unpaid invoices that were raised before 31st January
  7. I am currently using Quickbooks

I am happy to do a lot of manual entry to get this right. Any help will be greatly received!

Cash accounting is just an arrangement that exists with HMRC on how VAT is paid and reclaimed, mainly to assist with cashflow in smaller businesses. It doesn’t affect how the accounting is processed, so the Purchase and Sales VAT ledgers always reflect the accrual position, i.e. when an invoice is raised the VAT liability is created at that point.

When you file a cash accounting VAT return it will NET off the sales VAT and purchase VAT ledgers based on the proportion of VAT in the corresponding receipts and payments.

When submitting a VAT return in QuickFile you can manually adjust any of the boxes. It is likely that you will need to adjust the first VAT return, but subsequent ones should pull directly from the records you put into QuickFile, without any manual intervention. If in doubt have a word with your accountant who should be able to assist with the transition.

Hi Glenn,

That’s wonderful! I hadn’t thought about making adjustments which is a simple solution. Now you are telling me I can adjust the return I submit, it makes it even easier!

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