SimonH's dashboard

Hi Emily

The VAT calculation basis was Cash for all my periods. I have tried changing to Invoice and back to Cash for the offending periods and nothing has changed

SimonH

Ok. I've worked out what Freeagent is doing with my figures now.

At some point between last April and now you MUST have retrospectively altered the way flat rate VAT is calculated to use the INVOICE DATE rather than the RECEIVED DATE. Now I'm not an accountant so I don't know whether this is correct or not. I do feel that its wrong to change the way VAT is calculated and then apply a retrospective change though.

Do you think you should issue a warning to people telling them this. And that if they unlock a VAT period then their figures are going to be recalculated? The recalculation will occur for any invoices that span a VAT rate change period or a 'discount' VAT rate period.

Finally... is there any way I can get these figures back to the way I want them?

Kind regards

SimonH

The VAT return calculated by Freeagent does not include the interest so its not that causing the anomaly.

I have knocked up a spreadsheet of all the invoices in that period, their payment dates, what Freeagent currently calculates the flat rate VAT to be and and what I calculate the Flat Rate VAT to be.

Incredibly my figures match the figure that I submitted to the revenue and the figure that Freeagent originally calculated.

The strange thing is that there are odd unrelated invoices where the Freeagent calculation is now way off and I can't figure out what it is doing. If you will allow me to send you the spreadsheet maybe you can shed some light on it.

Regards

SimonH

Hi Emily

In response to your question, none of these VAT periods were locked.

The reason they weren't locked is that the locking mechanism was preventing me from adding historic expenses, which I add from time to time (though not recently). I just never bothered locking the period again.

But surely the flat rate VAT calculation is based on invoiced income and not expenses. And no invoices have been added or changed retrospectively.

By the way does this mean that anyone who unlocks a VAT period for whatever reason will automatically have their figures recalculated?

More meat on the bone: Period 12/08 figure is out by over £50 (on a 50K turnover) as stated. During this period I came off the flat rate 1% discount. The next period is also incorrect but only by about 70p (again on a 50K turnover). All periods after that match up. So I suspect the changes I'm looking for occurred around the early part of the period mentioned above.