Hi,
Have done our first ever bank import and where fees are taken, could not find an easy way to account for the VAT.
Is there a way to recognise a fee and therefore get the accounting treatment for the VAT easier? Other than needing to raise an invoice?
Thanks
It’s not necessary to raise an invoice, but for cash accounting the bank entries will at least need to be tagged to a customer before they are picked up on a VAT return. You can either treat this as a payment on account or a payment to an invoice, both options are available within the bank tagging module.
If you are lodging a payment on account (prepayment) then you will have the option to declare the relevant VAT rate.
Thanks @Glenn - is it working in the same way for accrual accounting?
For accrual accounting it would need to be lodged to an invoice.
Bank charges/fees aren’t subject to VAT. I just tag all mine directly to the required nominal using ‘something else not on this list’.
@Lurch That is correct. However I meant fees charged to customer, where we agreed with customer to take them directly from the client account. Clients receive a statement issued from a different system, therefore no invoice is required, however these fees do bear VAT