I am on the Flat Rate scheme. I belatedly entered in October some cash purchases from April /June (last VAT period). The Jly/Sept VAT report is erroneously showing these late entries as VAT reclaimed on purchases (box 4 & 7).
How can I edit the VAT report to set boxes 4 & 7 to zero?
You can make a manual adjustment on the VAT return screen itself.
From the VAT return, click on the little red arrow on that line and it will reveal an adjustment box, similar to this:
If it’s appearing in box 4 that means you must have entered the purchase with VAT recorded, which you don’t normally do on flat rate (you just enter the gross total without itemising the VAT separately). If you edit the purchases to remove the separate VAT then the value should disappear from box 4.
Thanks Ian. But I thought VAT registered companies have to present their Annual accounts as Nett. So that would require the VAT to be shown on the purchase orders ??
Your accounts need to show the cost to you of your purchases.
If you’re not on flat rate then yes, you would present both your income and expenses net, since the vat you collected on your sales isn’t yours and the vat you paid you will claim back.
But on the flat rate scheme you aren’t entitled to reclaim VAT on your purchases (except capital assets) so the cost to you of those purchases is the total gross cost and that’s what you show on the expense side of your accounts. For income you show the income you keep, which is your gross sales less the flat rate percentage - how this shows in QuickFile is with the net as general sales and the difference between the vat you collected and the flat rate calculation as an adjustment figure on 4999 but the total turnover value is gross less flat rate as required.
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