I have an ongoing issue with a vat liability being carried over in my accounts. My understanding if what has gone wrong is that the SALES VAT was not recorded correctly back when we started the accounts in 2012. If I view the account for Sales Tax Control (2200) there are credits from invoices recorded but no debits to balance them to a journal as sales VAT. Similarly the records in the purchase VAT Control (2201) are also missing the journal entries. I am 100% certain that all vat has been accounted for so this is not my concern but because the records are not balanced within the accounts a liability is being shown which is not correct. Can anyone explain why these sales vat records don’t exist before July 2013 (I assume it is because there are no saved VAT returns - and if this is the case when it did start recording VAT should it not have made sure historic amounts were balanced?). If I recall that far back the return was still calculated in QuickFile and you completed the form offline. How would you correct this to remove the falsely reported liability?
Hello @sean1
If I view the account for Sales Tax Control (2200) there are credits from invoices recorded but no debits to balance them to a journal as sales VAT. Similarly the records in the purchase VAT Control (2201) are also missing the journal entries.
I would recommend speaking to your accountant about your accounting records you would normally process a manual vat journal.
Can anyone explain why these sales vat records don’t exist before July 2013
The automatic journal would only be processed when a vat return is created and saved in the software.
should it not have made sure historic amounts were balanced?
When you start using software you would normally enter an opening trial balance with all of your opening balance sheet figures for the program to work from. Looking at your account I can only see opening balance entries for 3 bank accounts (HSBC, OPUS AND Amex), no other opening balances have been recorded.
How would you correct this to remove the falsely reported liability?
You are better off speaking to your accountant for tailored professional advices as we are not accountants nor bookkeepers.
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