Hi There.
We have difference between the debit and credit figures on our VAT Liabilty Nominal…
We use VAT cash accounting.
Can anyone tell me why we have a difference?
Is it the fact that we have invoiced people and they haven’t paid us yet?
Thanks
2202 should only get transactions once you’ve submitted your VAT return, and will balance back to zero when you’ve paid (or been paid back by) HMRC for the box 5 amount of the return.
There is sometimes a small difference shown here which is due to rounding. Usually the amount is minimal and nothing to worry about.
Although, if you’ve not tagged the VAT payment (or not made it yet), this will also show as a balance on 2202, as @ian_roberts rightfully says. Tagging the payment or refund as VAT will balance this out.
Hi Ian and Support.
This isn’t a small amount… It’s £11,000…
Any ideas?
How have you tagged your VAT payments from the bank account (if any)?
Not this quarters but it’s not that amount…
Nominals will pick vat figures on accrual basis (invoice) and if you are on cash vat , vat return will be prepared by system on actual cash received and paid, there will always be difference between vat return vat liability and as per nominals which need reconciling at year end to assure every thing is OK
Thanks for the information…
So… How do I work out how much vat we owe should our clients all pay?
As you’re on cash accounting, you could just run a VAT report (Reports >> VAT Return), ensure the dates are correct, but don’t submit it.
From the outset, this should give you a good idea of your VAT liability.
You don’t need to worry about making sure your clients need to pay before vat return is finalised, on QF it will work out vat return purely on cash basis, i.e the amount you have revived on sale invoices and payments made for vat able expenses.
Say your sales invoice is 200+vat, you have received only 100, system will work out vat return figures based on 100
How do I know if there is an issue or not if I just assume the system is working?
I can’t see a way that we have a difference of £11,000…
QuickFile works on a double-entry basis, which means that every credit has a balancing debit too.
If your chart of accounts didn’t balance, we’d know about it. So that £11,000 has come from somewhere. If you view that nominal for a longer period of time, you should see how that balance has come about - whether it’s a journal, or tagged bank entry.
It’s likely that a payment for a return hasn’t been tagged correctly, or a journal has been altered. But I’d recommend looking at the history of the nominal as a starting point.
If you toggle between vat on accrual basis and vat on cash basis by keeping dates consistent under vat settings and generate vat returns, you will notice the difference of vat between cash and accrual basis, that should be the difference for reconciliation purpose, you can export data from both returns to spot what are the invoices causing the difference on accrual and cash basis, this shoudl give you confidence on system that it is working
I’ve found it… There was a VAT Payment which was tied to Corporation Tax…
Thanks for all of your help in this matter.
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