We’re in the process of registering for VAT and I’m trying to figure out how to go about tagging transactions moving forward.
We’ve also just activated our automated bank feed.
The complication is that this is currently pulling in all transaction amounts along with bank charges all in the same item. It appears that when split-tagging, it is not possible to post to an invoice.
I seem to understand that while this is okay while we’re still not VAT registered, once VAT needs to be accounted for this is no longer recommended.
What’s the solution/procedure here other than going back to manually pulling ‘accounting’ statements out of Transferwise and uploading in QF so we can tag appropriately?
For example, if we send a bank transfer to a supplier for 100 and get charged 60p by Transferwise, the bank feed will only pull in ONE payment to the supplier for 100.60 GBP and disregard the fact that this is inclusive of bank charges.
Right now, we’re tagging these by selecting ‘something else not on this list’ and then creating two separate entries, but I seem to gather this won’t work once we’re VAT registered as all transactions need to be tagged to an invoice.
Not very familiar with these things so I hope I’m making some sense…
If you read through the guide that I linked above this explains how you can tag your invoices and then you can create an invoice for the fees and tag this to the difference
PLUS, this is nothing to do with transfers between accounts…we’re using Transferwise as a current account not a merchant account. We have incoming and outgoing transactions that are inclusive of bank fees, looking at this article this doesn’t answer my question at all
If the feed is giving you one transaction for £100.60 then your only choices are (a) delete the transaction from the feed and manually create two transactions for £100 and £0.60 which you can tag separately or (b) create a separate holding bank account anyway, tag the £100.60 as a transfer to the holding account, then make the £100 and £0.60 transactions in there instead. There’s no getting around the fact that you have to separate the payment to your real customer and the fee payment to TransferWise.
If you get any kind of monthly statement from TW detailing all their fees then you might be able to simplify it a bit by just letting the fees accumulate in the holding account and then clearing them in bulk based on the statement, but I’ve only ever used TW for one off payments rather than holding a balance in the account so I can’t speak from experience.
Yes. Once you turn on the VAT registered option you’ll be able to itemise the VAT on your sales invoices and purchases, and QuickFile will use this information to calculate the boxes for your VAT return.