I just became VAT registered from Oct. I can backdate the input tax (vat on purchases) on all stock I held at this date. Anyone know good way of calculating the backdated input VAT using quickbooks
Go back to all the invoices since that date and add the Vat code and QB wil do the rest.
You have to have been charged Vat to recover it so make sure you have the vat invoices or its not allowed.
Sorry I will try to be clearer.. My registration dates is Oct 1st 2011.I am starting my QB account from April 1st 2011. (6 months before) The existing stock prior to that needs to be entered (I have no record of invoices prior to that date). I was think of entering all the stock as purchase orders with the same date (April 1st) and a Vat code which presumably would show on the vat 100 input vat. However I think it would then show as a £6000 (value of stock) gain on the profit/loss (tax side) which obviously isnt correct.
If I just import the stock quantities then they arent going to show on the vat report input tax (vat claims on purchases) at all.
You seem to have missed the basic principle of Vat. That is you have to have Vat invoices to enter to reclaim the Vat paid. HMRC will at some time want to see evidence of the Vat paid out. They do come around and inspect your accounts.
You are entitled to reclaim Vat for purchases prior to registration but only against BonaFid'e Vat invoices. So if you have them use them if not talk to HMRC and see if they wil give you a dispensation to enter a Vat reclaim based on the value at time of registration.
If they do then make sure that is documented by them and you can then make a Vat adjustment in QB.
Yes I have the paper vat invoices for the stock. The only reason I am thinking about enterring them in QB prior to April 1st os to reclaim the vat. I dont have time to go back and enter sales invoices. Hope you can see my point now
Because you have probably entered stock inclusive of vat the stock asset account if you have one will be overstated by the value of vat.
You have to make a value adjustment of each item of stock to the other expense account by the Vat value, (Divide value by 120 then multiply by 100 difference is the vat that wil be posted to the expense account)
When finished you will have the value of the Vat.
Now do a vat adjustment from the vat menu and post this to same expense account using the standard puchase vat item and the result should be zero as one contra's the other.
The vat is reclaimed in current vat period due to the adjustment.
Now make sure you set all your items to use the correect vat code, you do this in bulk from teh manage vat menu.
I could see how this would be useful if my information was already in QB but it isnt so presumbly if i just enter purchase orders all dated before 1st Oct, then the reclaimed vat would show on the vat 100?
Also slightly different question... in order for profit and loss report to be accuarate for tax purposes (ie dont pay tax on vat) I presume I should enter the inventory prices excluding vat and the sales prices excluding vat ???
The problem is the ebay sales prices in thepaypal download that is used to generate sale receipts already includes the vat.
Phil
Yes you can enter the invoices if thay have not been entered in which case the stock asset account is not over stated and entering the invoices will correctly strip out the vat and post to the vat account. Enter with correct dates as paid and QB will sort the vat for you.
Before you start do a File vat 100 report from start of data entry, use date 1/1/1990 to the day before your registration date or nearest period end. If its zero file vat for that period to lock out past periods then enter data and all will be posted in next vat file.
The item prices shpould be entered exclusive of Vat as should the sales prices.
When entering any invoice/sales receipt you can elect to enter prices inclusive of vat and therefore its not an issue just save the invoice /sales receipt and the rest of the input is inclusive.
However if you are importing a datafile to create these it might need to be looked at to see if its correct.
You can also elect to enter item prices inclusive of Vat as there is a selection on each item for this. A simple iif export & import of the item list changing the column labelled "AMOUNTINCLUDESTAX" from "N" to "Y" will sort this for you. (about five minutes work)
That sounds like it should work but I dont think it will as wont it add all the existing stock to the vat account even if it was sold before the vat registration date? whic would be incorrect as you arent allow to claim stock that was sold before registration
NO, existing stock & transactions will not change.
Entering bills posts the quantity & value of stock to the stock asset account and it post the vat element from those bills to the Vat account. Prior to turning on Vat this account did not exist.
Existing stock cannot post to vat account.
There is no transaction to do this.
or the pre VAT registration period do I initially set VAT to off and entered stock prices excluding vat ??? but then that is not the price I paid for the stock so the profit and loss is then wrong.
I dont whether it just this software thats difficult to use or whether its the accounting system that is just logical. I have a degree in computers and I still cant figure this out.
right this is what i propose to do.
Can you see any problem with this from a QB or accounting point of view
1) enter all stock that existed as of April 1st 2011 (from stock check) by entering stock bills. All bills will be dated 1/4/11 and cost prices will be enterd inclusive of vat
2) ensure VAT settings is OFF
3) enter all bills for stock between april and my vat registration date
4) import all my sales from paypal using third party software upto vat registration date.
5) Turn on Vat setting
6) continue entering bills for stock and importing sales transaction
I will manually calculate all input tax that can be claimed before VAT registration (ie anything I still had in stock or still use for business at the registration date) as i cant see a way of doing this using the software. Please someone enlighten me if there is
errm.. do I need to enter this on my first vat return or can I do this in the future and if I'm submitting electonically how do I add this to the return.
Thanks
If you started QB from April 2011 and registration for Vat was from Oct then every input from October has to be made setting the Vat code for each transaction.
Existing transactions are not changed or altered.
You need to make sure your Purchases price & sales price on each item is set to be exclusive of vat.
If you want to add in for Vat that is paid on the stock already in stock at time of registration then you have either to alter the invoices entered that created that stock to add the vat code, or, as you say these are not entered then enter them. But then the stock value was based on the receipted stock and not the billed stock.
You cannot have stock unless its received or billed.
QB then gives you the Vat 100 report inclusive of the Vat on purchased/billed stock. If you are cash accounting for vat the Vat 100 will be based on the fact that he bills are paid.
If you are accrual accounting for Vat then the Vat 100 give you the Vat as invoiced/billed date.
You can also elect to adjust Vat for the Vat paid prior to vat registration, this implies you did in fact enter the bills for the stock in the first place and the stock value is inclusive of the vat paid on purchase.
From what you have stated in the various posts I would suggest it might be easier and more accurate to start a new data file from the date of registration and enter opening balances and enter the adjustment for Vat based on manual calculation.
The reasoning for this is I doubt now your starting position was correct and startup figures were accurate.
