Can someone please help. My first VAT is due end of January and i have set the flat rate percentage on VAT settings however even though i set flat rate, the cash accounting is automatically selected I have entered all sale amount for October to January, and set the date from 01/10/2013 to 31/01/14 but when i ran the VAT return, the report is coming out with 0.00 in all fields. Why is this happening and how can this be resolved.
Does this mean i can not account for VAT until i get paid by my client? hence the reason for cash accounting that was selected.
Yes cash accounting calculates VAT based on payments received by clients and payments made to suppliers, not at the point an invoice is raised. Flat Rate VAT is a form of cash accounting so without any payments or receipts falling in the accounting period the return won’t produce any figures.
Thanks Glenn, yes this helped. I have another question also on VAT, but on the purchase side, as i am on a flat rate cash accounting scheme( my vat is on percentage of my turnover irrespective of the vat i pay out) bearing this in mind, should my purchases/expenses be entered with VAT or should the vat be 0.00?