First of all, I’d just like to say how great I think QuickFile is having just migrated 3 trading quarters from our antiquated desktop version of Solar accounts. But now to my question concerning an aspect of the second-hand margin scheme I haven’t found in the Q&A section.
Unlike the car sales industry which seems to be quite straightforward when it comes to calculating the profit on purchased and sold second-hand vehicles, the business I work for doesn’t sell-on used items in a straightforward way. We can buy a used item for stock and split its components into a number of sales (a bit like a scrap yard I guess). Therefore, we have an agreement with HMRC as follows:
- Record all second-hand stock purchases as zero rated for VAT
- Record all second-hand sales as zero rated for VAT
- At the end of a VAT quarter, subtract the quarter’s second-hand stock purchases from the quarter’s second-hand sales to produce a profit figure for the quarter’s second-hand sales
- Apply VAT to the second-hand sales profit figure and manually add the liability to the Box 5 figure on the return
Within QuickFile, I have added 2 nominal accounts for second-hand sales and second hand purchases which give me the figures I need to work with to calculate the profit for VAT liability. But I’m looking for a way to record a calculation within QuickFile.
Creating any sort of invoice involving the second-hand sales figure and the second-hand purchases figure adds extra numbers to the second-hand sales nominal account, which is inaccurate. I am wondering if there is a way to work with the figures in the 2 nominal accounts to achieve a profit figure which can have VAT applied to it, without affecting the reality of the sales figures. I am thinking something along the lines of using ‘holding accounts’ in the bank account section as there seems to be the ability to move figures about without affecting sales figures.
I’m sure there’s a way of doing this, but I don’t understand how QuickFile controls its relationships between transactions and nominal accounts. I don’t really want to experiment too much on live data either so I’m hoping someone can make a suggestion on how I can produce a profit calc for second-hand sales or simply say, “forget it, just do it manually on your VAT return!”
Thanks for any help.