Help required please
I am trying to fathom something out and am having difficulty in doing so relating to submitting an online VAT return.
I have ‘set up’ an account with direct feeds from our bank account, plus also an additional feed from our credit card (American Express). The Amex is used extensively for various purchases, some VAT, some non-VAT, and some mixed VAT, i.e. food shopping where some items are ‘VATable’ and some are ‘non-VATable’, but with the total being charged to the Amex card. Therefore, the total charge is shown on the Amex banking feed.
The questions I have are:
When Amex take the monthly direct debit out from our current account (shown on the banking feed from our bank), how do I show the individual payments from the Amex banking feed on our current account banking feed, allowing for a refund of VAT on the online VAT return, without affecting the balance on the current account feed?
Secondly, with some items paid for on the Amex card, how do I separate the VAT payable (therefore, being able to claim the VAT back) items from the total figure charged on a mixed VATable and non-VATable purchase and show this on the current account feed without affecting the balance?
Basically, I am trying to ensure that we pay the correct amount of VAT, but also claim correct amount back as well
Any advice on this would be really helpful as it all seems very complicated!
For the return you would need to involve invoices to show your VAT breakdown. So each payment should have a corresponding VAT receipt, it is then these receipts that the report looks at to calculate the VAT owed
If you paid for things using your Amex card, you would have a receipt for your purchases wouldn’t you? so by creating a receipt in quickfile, you can allocate which parts where vatable and which were not.
Then you can tag the payment from your Amex to the receipt.
Side note, you don’t mention what your business is, but usually food shopping is not an expense for business purposes.
So you shoudnt be claming any of that vat back anyway
We are a business that organises and runs residential opportunities for schools, young people, etc., therefore, as well as accommodation, we ‘feed’ those young people whilst they are away from home, hence, claiming back the VAT where applicable.
Is there any way of importing purchases made on the Amex card and shown in the credit card feed, into the current account feed? Rather than create a separate purchase in the current account feed.
I’m not sure you quite understand, you need more than just the bank accounts for the VAT return. You need to process the VAT receipts/invoices which will then show in your Profit & Loss. Some items you will be able to claim VAT back on, others you won’t be able to depending on what the expense it.
I would highly recommend getting in touch with an accountant, there are a few available through QuickFile which can be found: https://accountants.quickfile.co.uk/
So you have one bank account in QuickFile representing your current account, and another one representing the Amex card. When you make purchases those will show up on your Amex account feed as money out, which you would tag as “payment to a supplier” and fill in the details including the net and VAT totals according to your VAT receipt from the shop - you need a valid VAT receipt to claim back the VAT. What this does behind the scenes in QuickFile is to create a “purchase” for each receipt and it is these purchase records that record the VAT breakdown.
When you pay your Amex bill that is simply treated as a bank transfer from your current account to the Amex account - you’ve already recorded the purchases when you tagged the transactions on the Amex account so you don’t record them again on the current account.
The feeds relate to your bank statements or credit card statements, so shouldn’t be merged. You need to agree the totals to your actual statements, preferably monthly, to make sure you are capturing all the transactions.
Let’s dissect your query
The bank payment to the credit card: that’s normal and nothing is required at that end
Vat and no vat goods: when tagging you need to make sure it’s tagged properly meaning vat and no vat should be added at that time. Now with QF it’s not different. If it’s vat able item you need raise a invoice and match it off.
If you choose “something else not on the list” that by passes the vat so don’t use that Method.
I hope it works as rest of the vat run and adjustment will automatically fall in place.
If you need any professional advice please feel free to PM me.
Momin - Kube Accounts