I started using QF at the beginning of my tax year (01 May). At that time I owed the VAT for the quarter just ended. For arguments sake let’s say I owed £1000. Where should I have entered that I owed money as an ‘opening balance’?
Later that £1000 left my account and that is recorded by QF and I tagged it as ‘VAT Liability (2202)’. Should I have entered the £1000 as the opening balance so the account would balance out when paid?
EDIT: I’m cash accounting for VAT if it matters.
That sounds like the correct way to do it, as the opening balance would be treated as you owing the VAT.
What did you use prior to QuickFile?
Yes, I thought so but I don’t think I did it! My question is where should I have entered the opening balance!
Was using FreeAgent.
When you came from FreeAgent, did you import a trial balance for your other opening balances?
The opening balance would be set as part of an journal. These can be created by going to Account Settings >> All Settings >> Setup your opening balances. But as it’s a journal, it would require a balancing entry. This data would likely be in FreeAgent, but if you imported a trial balance, I would expect this to have been part of it.
No, I didn’t import, I just did the bank accounts manually. I don’t think my books are too complex!
What’s my best option. I could import a trail balance or just add some journal entries. For the latter, where/how should I enter the VAT I owed at 01-05-20?
The only other stuff I’d be worried about is capital equipment but I don’t think QF does depreciation calculations as automatically as FreeAgent. But that’s another question for another day!
If you import a trial balance now, it may throw your other figures out because you would suddenly end up with opening balances for various nominals.
We actually have a guide on entering VAT opening balances which may help.
Thanks for the link. I don’t think that works for me. Before starting with QF I had already submitted my VAT Return. So I had a ‘clean sheet’, I was starting a new year and a new VAT quarter. But I did owe the VAT £1000 and that was paid and is recorded by QF. So I think I should have a journal entry on 01-05-20 (my QF start and new year day) for £1000 in ‘(2202) VAT Liability’. But I’m not sure exactly how to enter this, if its a credit or debit or both.
As I understand it, I will be saying I owe HMRC £1000. Then when I paid it, it balances out. So somewhere in my accounts I should see how much I ‘owe’ for VAT today, but if I don’t enter that opening balance that figure will be out (by £1000)?
The opening balance vat journal needs a balancing entry. So you would need to include the total of the sales tax less purcahae tax which gives you the vat balance.
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