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QuickBooks Flat Rate VAT

 
 
Charles Fowler
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      09-23-2004, 10:33 AM
We are considering changing to the Flat Rate VAT (on a cash basis) -
How does one account for the input VAT in the VAT Control account?
There will otherwise a nominal "profit" (preferably rather than a
Loss)will build up. Can you please help?[Using QuickBooks Pro 2003]
 
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Peter Saxton
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      09-23-2004, 11:27 AM
On 23 Sep 2004 03:33:02 -0700, (E-Mail Removed) (Charles Fowler)
wrote:

>We are considering changing to the Flat Rate VAT (on a cash basis) -
>How does one account for the input VAT in the VAT Control account?
>There will otherwise a nominal "profit" (preferably rather than a
>Loss)will build up. Can you please help?[Using QuickBooks Pro 2003]


The same way as if you were not VAT registered - it would not go
through a VAT control account.

I would post the payment of VAT to HMC&E as an expense.

I've not seen any suggested methods so the above is what I would
consider the most sensible way to account for the VAT transactions.


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Peter Saxton from London
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Charles Fowler
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      09-27-2004, 07:34 AM
Thanks for the suggestion - so settle up the present VAT control
account; then in future, VAT on our Invoices becomes another income
category and the payment of VAT to HMC&E becomes an expense.


Peter Saxton <(E-Mail Removed)> wrote in message news:<(E-Mail Removed)>. ..
> On 23 Sep 2004 03:33:02 -0700, (E-Mail Removed) (Charles Fowler)
> wrote:
>
> >We are considering changing to the Flat Rate VAT (on a cash basis) -
> >How does one account for the input VAT in the VAT Control account?
> >There will otherwise a nominal "profit" (preferably rather than a
> >Loss)will build up. Can you please help?[Using QuickBooks Pro 2003]

>
> The same way as if you were not VAT registered - it would not go
> through a VAT control account.
>
> I would post the payment of VAT to HMC&E as an expense.
>
> I've not seen any suggested methods so the above is what I would
> consider the most sensible way to account for the VAT transactions.

 
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Peter Saxton
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      09-27-2004, 09:12 AM
On 27 Sep 2004 00:34:43 -0700, (E-Mail Removed) (Charles Fowler)
wrote:

>Thanks for the suggestion - so settle up the present VAT control
>account; then in future, VAT on our Invoices becomes another income
>category and the payment of VAT to HMC&E becomes an expense.
>
>
>Peter Saxton <(E-Mail Removed)> wrote in message news:<(E-Mail Removed)>. ..
>> On 23 Sep 2004 03:33:02 -0700, (E-Mail Removed) (Charles Fowler)
>> wrote:
>>
>> >We are considering changing to the Flat Rate VAT (on a cash basis) -
>> >How does one account for the input VAT in the VAT Control account?
>> >There will otherwise a nominal "profit" (preferably rather than a
>> >Loss)will build up. Can you please help?[Using QuickBooks Pro 2003]

>>
>> The same way as if you were not VAT registered - it would not go
>> through a VAT control account.
>>
>> I would post the payment of VAT to HMC&E as an expense.
>>
>> I've not seen any suggested methods so the above is what I would
>> consider the most sensible way to account for the VAT transactions.


I would suggest that VAT on your invoices is just treated as part of
sales. This is because the VAT on your expenses is treated as part of
expenses.

Your suggestion has similar merit except it involves more work.


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Peter Saxton from London
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Andy Lord
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      09-28-2004, 06:19 AM

"Peter Saxton" <(E-Mail Removed)> wrote in message
news:(E-Mail Removed)...
> On 27 Sep 2004 00:34:43 -0700, (E-Mail Removed) (Charles Fowler)
> wrote:
>
>>Thanks for the suggestion - so settle up the present VAT control
>>account; then in future, VAT on our Invoices becomes another income
>>category and the payment of VAT to HMC&E becomes an expense.
>>
>>
>>Peter Saxton <(E-Mail Removed)> wrote in message
>>news:<(E-Mail Removed) >...
>>> On 23 Sep 2004 03:33:02 -0700, (E-Mail Removed) (Charles Fowler)
>>> wrote:
>>>
>>> >We are considering changing to the Flat Rate VAT (on a cash basis) -
>>> >How does one account for the input VAT in the VAT Control account?
>>> >There will otherwise a nominal "profit" (preferably rather than a
>>> >Loss)will build up. Can you please help?[Using QuickBooks Pro 2003]
>>>
>>> The same way as if you were not VAT registered - it would not go
>>> through a VAT control account.
>>>
>>> I would post the payment of VAT to HMC&E as an expense.
>>>
>>> I've not seen any suggested methods so the above is what I would
>>> consider the most sensible way to account for the VAT transactions.

>
> I would suggest that VAT on your invoices is just treated as part of
> sales. This is because the VAT on your expenses is treated as part of
> expenses.
>
> Your suggestion has similar merit except it involves more work.


Surely if you switch off VAT tracking you would have to calculate VAT
manually on each invoice and include it as an invoice line?

Andy


 
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Peter Saxton
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      09-28-2004, 07:41 AM
On Tue, 28 Sep 2004 07:19:59 +0100, "Andy Lord" <(E-Mail Removed)> wrote:

>
>"Peter Saxton" <(E-Mail Removed)> wrote in message
>news:(E-Mail Removed).. .
>> On 27 Sep 2004 00:34:43 -0700, (E-Mail Removed) (Charles Fowler)
>> wrote:
>>
>>>Thanks for the suggestion - so settle up the present VAT control
>>>account; then in future, VAT on our Invoices becomes another income
>>>category and the payment of VAT to HMC&E becomes an expense.
>>>
>>>
>>>Peter Saxton <(E-Mail Removed)> wrote in message
>>>news:<(E-Mail Removed) m>...
>>>> On 23 Sep 2004 03:33:02 -0700, (E-Mail Removed) (Charles Fowler)
>>>> wrote:
>>>>
>>>> >We are considering changing to the Flat Rate VAT (on a cash basis) -
>>>> >How does one account for the input VAT in the VAT Control account?
>>>> >There will otherwise a nominal "profit" (preferably rather than a
>>>> >Loss)will build up. Can you please help?[Using QuickBooks Pro 2003]
>>>>
>>>> The same way as if you were not VAT registered - it would not go
>>>> through a VAT control account.
>>>>
>>>> I would post the payment of VAT to HMC&E as an expense.
>>>>
>>>> I've not seen any suggested methods so the above is what I would
>>>> consider the most sensible way to account for the VAT transactions.

>>
>> I would suggest that VAT on your invoices is just treated as part of
>> sales. This is because the VAT on your expenses is treated as part of
>> expenses.
>>
>> Your suggestion has similar merit except it involves more work.

>
>Surely if you switch off VAT tracking you would have to calculate VAT
>manually on each invoice and include it as an invoice line?
>
>Andy
>

Sorry, I stopped thinking about QuickBooks and was thinking of the
generic case.

Yes, I would say your sales invoices would therefore be including VAT
accounting but whether you would bother with accounting for your VAT
on purchase invoices is a moot point. You could do so and just have a
journal for the difference between your flat rate payment and your
accounted VAT or you could ignore VAT on purchase invoices and post
VAT on sales as a revenue item and your VAT payment as an expense.
With the former there seems no advantage in using the flat rate scheme
unless you expect to make a profit on the treatment.


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Peter Saxton from London
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