VAT on purchase invoices not appearing on VAT Return

Accounting
1

I have 3 invoices from Plus Net. I have entered them in the system and the VAT is shown on the purchase but it does not show on the VAT Return summary. The payment date is within the period.
Please help, driving me crazy

2

Are you set to cash or accrual accounting in your QuickFile VAT settings? If accrual then it’s the purchase invoice date that matters, not the payment date.

If that’s correct, have you accidentally set these purchases as one if the special settings like out of scope?

Is this your first return? If so, check if you’ve configured the right “vat start date” in your settings as QuickFile will ignore anything before that date.

3

Thanks for your reply Ian. Yes it is my first time. On the VAT report the VAT was in with the NET amount and the VAT was O. As you rightly said changing the purchase date corrected the problem but now the purchase order numbers are not in sequence they are quite random.
Is there any way to change the Purchase number?

4

The QFnnnnn numbers are purely for your own reference, they reflect the order in which the purchases were created, not necessarily chronological order of purchase date. The date of the purchase should always be set to the date on the invoice/receipt that the supplier sent to you, which may be before, the same, or after the date you paid the supplier.

I’ll ask my question another way - did you intend to use cash accounting or accrual accounting? If this is your first return then now is the time to decide which one you want to use as it’s a bit of a pain to switch methods later. They both have their pros and cons. On cash accounting:

  • you don’t have to pay over sales VAT to HMRC until your customers have paid you, but
  • you can’t reclaim purchase VAT from your suppliers until you have paid them

conversely on accrual accounting:

  • you have to pay the sales VAT in the quarter when your invoices are dated, even if your customer takes a long time to pay you, but
  • you can reclaim VAT on your purchases as soon as the supplier has invoiced you, even if you don’t pay them until later.

Which method is better for your cashflow depends on the nature of your business.

5

Thanks again Ian. This makes perfect sense. I have opted for cash accounting but have always used accrual accounting. I have now wiped all the data so I can start again. Thank you so much.

6

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