QuickBooks Flat Rate VAT

Discussion in 'UK Accountancy' started by Charles Fowler, Sep 23, 2004.

  1. 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]
     
    Charles Fowler, Sep 23, 2004
    #1
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  2. Charles Fowler

    Peter Saxton Guest

    On 23 Sep 2004 03:33:02 -0700, (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.


    --
    Peter Saxton from London
     
    Peter Saxton, Sep 23, 2004
    #2
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  3. 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 <> wrote in message news:<>...
    > On 23 Sep 2004 03:33:02 -0700, (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.
     
    Charles Fowler, Sep 27, 2004
    #3
  4. Charles Fowler

    Peter Saxton Guest

    On 27 Sep 2004 00:34:43 -0700, (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 <> wrote in message news:<>...
    >> On 23 Sep 2004 03:33:02 -0700, (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.


    --
    Peter Saxton from London
     
    Peter Saxton, Sep 27, 2004
    #4
  5. Charles Fowler

    Andy Lord Guest

    "Peter Saxton" <> wrote in message
    news:...
    > On 27 Sep 2004 00:34:43 -0700, (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 <> wrote in message
    >>news:<>...
    >>> On 23 Sep 2004 03:33:02 -0700, (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
     
    Andy Lord, Sep 28, 2004
    #5
  6. Charles Fowler

    Peter Saxton Guest

    On Tue, 28 Sep 2004 07:19:59 +0100, "Andy Lord" <> wrote:

    >
    >"Peter Saxton" <> wrote in message
    >news:...
    >> On 27 Sep 2004 00:34:43 -0700, (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 <> wrote in message
    >>>news:<>...
    >>>> On 23 Sep 2004 03:33:02 -0700, (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.


    --
    Peter Saxton from London
     
    Peter Saxton, Sep 28, 2004
    #6
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