VAT annual accounting balancing payment appearing in following year

Accounting
1

I’m on annual accounting, which means I pay 10 interim payments during my accounting year, then a balancing payment a few months later.

I’m coding all these as 2202 VAT liability, but that means that the balancing payment appears in my next year’s VAT report, screwing up my numbers

Is there a better way to do this?

2

In what way is it screwing up your numbers? This sounds to me like exactly the way you should code it - all the payments on account and the balancing payment will be debits on 2202 and the total should match the credit on 2202 from your single annual VAT return. Yes, at year end your balance sheet will still show a liability for the difference between what your return says you owe and what you’ve paid up to that date as payments on account, but that’s exactly as it should be, at your YE date you do have such a liability until such time as you pay the balancing payment.

3

I do, but then because I make a balancing payment after my year end, that shows up as a credit in my next tax year, throwing the figures for that year off.

e.g. I make 10 x interim payments of £1000 during 2018/19, but come April, my VAT liability is £15000. So in June 2019, I make a balancing payment of £5000, but then Quickfile shows my 2019/20 VAT report as being £5000 in credit, whereas the £5000 should be assigned to 2018/19 and I should begin the 2019/20 year at zero

I hope I’m being clear

4

I still don’t follow. Your balance sheet at the end of April should have a £5000 liability on 2202. At some point during the following year you pay that off, as well as paying that year’s interim payments, so your balance sheet at the end of that year will again show the correct liability (equal to the balancing payment you will be making the following June).

Are you looking at the chart of accounts rather than at the balance sheet/trial balance? Remember that the CoA doesn’t show balances, it only shows the sum of transactions within the relevant period without taking account of any opening balance on any of the nominals. The TB report is better in that respect as it shows you the same info as the CoA but has the opening and closing balances too.

5

Ah, I see now. Because I started using Quickfile at the beginning of a tax year, it included the balancing payment from the previous year, but I hadn’t set my opening balance to reflect that.
Thanks for your help - makes sense now!
Chris

6

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