VAT Margin Scheme and VAT Journal

Hi,

I’m wondering if I use a journal to administer a VAT Margin Scheme for second hand vehicles, that QF will pick up the journal entries and feed them into the VAT return?

This is an example of what I am planning to do (using simple numbers)

image

The Sales Invoice
I can create an ordinary sales invoice for 1,000 with no VAT.
When I post this invoice, it will

Dr Receivables / Bank 1,000
Cr Sales 1,000

This 1,000 of sales will feature Box 6 of the VAT return: Total Value of Sales excluding VAT, QF will pick up this value automatically.

The VAT Margin
The VAT payable with the above figures is 67.

I’m planning to use a journal to post this, but I’m not sure which code to post the 67 payable to, and whether I can be sure it will be picked up by QF.

I could use this journal:

image

Or this one

image

I’m hoping someone can confirm that the VAT return will pick up the 67 in either or both of the journals.

Using Invoices for the 67
I read the help forum and saw that using invoices has been suggested.

I couldn’t square the use of invoices, because if I post an invoice then the system is expecting to receive a payment.

In the scenario above, the 67 VAT payable isn’t charged to a customer, it is charged to the company’s profit on that individual sale (400 x 1/6 = 67).

The customer will pay 1,000 and QF will receive the 1,000 and settle the invoice.

But if I use the method I found in the help forum (here), (and in the example image below) then QF will, unless I am mistaken, show a receivable of 3,600, of which the customer will only ever pay 3,500, and this will leave 100 unpaid on this invoice.

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Any suggestions / comments welcome :slight_smile:

Thanks.

Hello @Darren_Smith

You would just adjust it so it balances

So, if you bought it for £1,000, and sold it for £1,500 - the £500 would have to be inclusive

Hi Steve,

Goats are like mushrooms. Because if you shoot a duck, I’m scared of toasters.

If there’s anyone who can give a sensible reply, please do !

TIA

Hello @Darren_Smith

If you sell a car to a consumer, it would be gross price (So the VAT would already be included)

@Joes example was selling the car for £3600

Here is the same example, I have adjusted it so it balances (if I was selling the car for £3500)

Thanks for expanding on this.

It makes sense now and I’ll use this method.

.

(I’m not afraid of toasters…gnomes however!!)

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