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VAT periods for cash accounting
Sorry guys, I have trawled through a few threads and can't get this solved to my satisfaction so here goes:
I cash account for VAT purposes. I have an invoice dated 09 June 2009 that is due to be paid 09 Decemeber 2009. Therefore I understood that I would reclaim the VAT on the date I pay it. FreeAgent wants me to unlock all my VAT periods and reclaim it in the VAT period that covers June. Therefore throwing out every VAT return hence. Am I being a dummy or is this completely wrong? Answers on a postcard.........
I cash account for VAT purposes. I have an invoice dated 09 June 2009 that is due to be paid 09 Decemeber 2009. Therefore I understood that I would reclaim the VAT on the date I pay it. FreeAgent wants me to unlock all my VAT periods and reclaim it in the VAT period that covers June. Therefore throwing out every VAT return hence. Am I being a dummy or is this completely wrong? Answers on a postcard.........
I’m unhappy and can't believe it is December!
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Inappropriate?Hi Emz,
Have you already entered this invoice into FreeAgent, or not, please?
Kind regards,
Emily -
Inappropriate?Not until today. The VAT period was locked and FA would not lt me enter the bill unless I unlocked the VAT period. So that is what had to do to enter the bill. Does that make sense? -
Inappropriate?Hi Emz,
Yes that does indeed make sense. Once a VAT period is locked, you can't enter any transactions during that period - even if they won't affect the VAT return.
If the June and all subsequent returns are set for cash accounting, then you should be able to enter the bill in June (once you've unlocked the historic VAT returns) and then post the payment in December, and FreeAgent should reclaim the input VAT on the December VAT return.
Does that help, please?
Kind regards,
Emily
1 person says
this solves the problem
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Inappropriate?Hi Emily
Yes, it does. Would the correct procedure have been to input the bill as today's date to avoid unlocking a VAT period?
Cheers
Emz
I’m daft
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Inappropriate?Hi Emz,
Strictly speaking, the correct procedure would have been to enter it before the June VAT return was locked :-)
But if that's not possible (e.g. your supplier is a slowcoach at sending out invoices), then yes, I would probably put the bill into December to avoid unlocking VAT periods, which should be done with extreme caution as you don't want to upset HM Revenue if they do an inspection.
Kind regards,
Emily
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