Purchases on behalf of clients

Accounting
1

I hope somebody can help! We are currently sorting the end of quarter VAT submission and having issues. We are on the flat rate scheme, 13.5%.

I will explain the situation with an example below:

Client invoice = £1600

This is made up of:
£1200 the fee for our services
£200 VAT
£200 purchase made on behalf of the client

(The £200 purchase on behalf of the client is on a personal credit card which is logged on the software. On the invoice, I have listed this purchase as a separate item from the fee for my services. So on the chart of accounts we have two figures, one for general sales which is our fee and one for the purchases made on behalf of the client).

However, for the VAT return, the fee for our services is being added to the purchases made on our client behalf to give us the turnover. This is however incorrect as the VAT should be calculated on our fee for our services alone and not for the purchases made on behalf of the client.

Any idea of how this can be split up so that the purchases are not included in the VAT return calculation? I have tried splitting the transaction but then the figure cannot be tagged to the appropriate invoice.

Any help would be most appreciated! Thank you in advance.

2

Hi @Liam_Whitfield,

I would advise you to speak to your accountant to make sure that it is being recorded correctly.

Unfortunately I am unable to offer you specific accounting advice as I am not an accountant, but once you have been told how it should be recorded we would be more than happy to help you understand how to do this in QuickFile.

3

Thanks for the reply!

I have already spoken to our accountant who is not familiar with the software and said that we just need to separate the purchases made on behalf of clients from our fee.

Shall I create separate invoices for the purchases made on behalf of clients? Or use the purchase section on the software to log these? This way the figures will not be included in the sales section of the chart of accounts and thus will not be added to the turnover sum.

Is there anybody on the team that I can phone regarding this issue?

Thanks again for your response it is much appreciated.

4

hi @Liam_Whitfield,

We don’t offer telephone support unfortunately.

If you create separate invoices, this would keep things separate but I can’t see how this would stop it being included in your VAT return unless you had a matching credit note to balance it off?

5

@QFBeth possibly if the disbursement invoice were marked out of scope?

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