I currently pay my VAT once a quarter, but ideally I’d like to pay it monthly.
Q1 - I’m not sure whether HMRC support this in their RTI (RealTime Basic PAYE Tools app), does anyone know
Q2 - Is there a way of reserving the VAT amount in the accounts, so that the P&L represents how much money you really have available? When it comes to paying the VAT amount, do you delete the items in the reserve account or somehow tag them as part payments of the VAT amount paid?
Many thanks,
Rob.
Re 1, RTI is about PAYE, not VAT, I didn’t think they were related.
Re 2, VAT doesn’t figure in the P&L at all, the amounts like “general sales” and “general purchases” are all ex-VAT totals. The VAT collected on sales and paid on purchases accumulates in the sales and purchase tax control accounts on the balance sheet, gets shifted to “VAT liability” when you run a VAT return, and the VAT liability account in turn balances out to zero when you make your payment to (or receive a refund from) HMRC.
Hi Ian, sorry, I forgot to thank you for your reply, I was totally confused and mixed RTI and VAT together, so you’re totally right. I also hadn’t twigged the P&L was excluding VAT which is perfect for seeing what my cashflow really is, without the complications. I can now go to the chart of accounts to see how much is due to be paid, or run the VAT report.