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VAT accounting dates for credit card transactions in Freeagent
HELP!!!...In preparing our VAT return in Freeagent we have noted that the credit card transactions are included in the VAT return in the month of the transaction (not the month the credit card payment is debited from our business current account). We need to account for the VAT on these transactions on the date the money is debited from our bank account. Have we missed something? Presumably all businesses need to do this but Freeagent doesnt' seem to do it for us currently?
We hope you can help!?
Heather
We hope you can help!?
Heather
I’m confused
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The company thinks this is not a problem.
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Inappropriate?Heather,
Isn't FAC doing it the correct way ie you can reclaim the input VAT when you buy the goods/service on your credit card rather than when you pay the credit card company?
1 person says
this solves the problem
3 Comments Add a comment
This solves the problem
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That's what I was thinking too but didn't want to look stupid by stating it!! :) -
Hi Stuart, Thanks!!! Our accountant told us years ago that we should account for VAT when the money was debited from our bank account but after posting my comment I checked the HMRC site and realised from the cash accounting definition that the Freeagent approach is correct!!! Thanks for enlightening us!!
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@djwhisky
It took me a few minutes to pluck up the courage to answer it!
@Heather
Pleased to help.
3CA
