Hi. I seem to have a problem with manual vat adjustments that are required for the second hand vat scheme?
This is how I manually adjusted for vat earnt on non vatable vehicles and while from an accounting point of view I believe its ok, for some reason it hasn’t fed in my vat returns??? I note on some other posts that there is an ‘adjustments’ field but mine haven’t posted there???
This an example of what I entered:
Journal Date: 15/11/2016
Journal Name: J5EXC 2nd hand margin scheme Auto Reverse Date [?]:
Nominal Code Description Notes Debit [GBP] Credit [GBP]
(2200) Sales Tax Control Account J5EXC ASTRA VAT CR 83.33
The manual adjustment would need to be made directly on the VAT return as per the guide here. The VAT return calculations in QuickFile are driven by sales and purchase invoices and don’t directly pickup journals.
If you use the method described in the link it will include the adjustment on the auto-generate VAT return journal. You can view and modify this as needed, the journal will be visible in the main list (Reports >> Journals).
Please let me know if I can be of further assistance.
Or if you post the credit side to “manual adjustments” in your original journal instead of “sales tax control account” then it’ll balance up automatically against the auto-generated VAT journal.
I still appear to have a problem with this manual vat adjustment??!!!
I have just amended 2 journals to the 2204 manual adjustment nominal code (as suggested in previous response) but they have not fed down into the vat return??? Extremely urgent as I have had a vat inspection and this return must be submitted today.
Journal Date: 2017Mar27
Journal Reference: Rolls Royce Loss vat adjustment
NOMINAL CODE DESCRIPTION NOTES DEBIT CREDIT
2204-Manual Adjustments Net loss on Rolls Royce VAT adjust on £5k loss 833.33
4010-Van Sales Net loss on Rolls Royce VAT adjust on £5k loss 833.33
Journal Date: 2017May19
Journal Reference: LS08UXN 2nd hand margin scheme
NOMINAL CODE DESCRIPTION NOTES DEBIT CREDIT
2204-Manual Adjustments LS08UXN C CLASS VAT LOSS 50
4010-Van Sales LS08UXN C CLASS VAT LOSS 50
Journals are not taken into account for the VAT return - only invoices (and where necessary, payments) are.
As per my post above, you will need to make a manual adjustment on the return itself, which will then post a value to 2204. You can then journal this value from 2204 Manual Adjustments to the relevant nominal code that the adjustment would apply to.
You would just need to make the manual adjustment on the return in the relevant box to show the value from your screenshots (£883.33 in total), similar to this:
So on the return itself, click the little red arrow at the end of the line, enter the adjustment in the box. When the VAT return is then submitted, it’ll create an entry for the values to 2204 for you to then journal out.
Ah ok thanks, its because another member said I could amend my original journal, that I thought it a better audit trail to do it this way, otherwise it will just show a bulk adjustment with no notes to show which vehicle etc it relates to??
So for a vat reclaim based on a loss can I put a negative adjustment in the sales adjustment box or I have to show as a reclaim (purchase and other inputs?)
Many thanks
Sarah
I believe @ian_roberts was referring to what I’ve just explained above. Once you’ve made the manual adjustment on the return itself, it would then balance up against the journal you’ve created.
So in effect, when you make an adjustment on a return, it posts a value to 2204, which then needs to be journaled away from there to show where it should be applied. As you already have a journal, it should just balance up as expected when you post the adjustment on the return.
The adjustment boxes will take either a positive or a negative value to adjust the values either way.
This isn’t something I’d be able to answer I’m afraid - you’re probably best confirming that with your accountant to be sure (I’m not one).
