yves Registered Posts: 28 Regular contributor ⭐
can anyone help me with the best way of dealing with this companies books

i have recently taken on the book keeping for a limited company

the company is not vat registered but all the previous suppliers entries have been entered on sage as if they were vat registered

please advise how i should deal with this on sage instant



  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘

    I had one of these last year, a client doing their own books set up sage incorrectly at the start.

    There are a couple of options available to you.

    I Completely redo the data base.

    2 Carry on and then at the end of the accounting period/ month/quarter journal the total credit balance (relating 100% to input VAT) on the VAT control account in the balance sheet to a new expense line that you could create called 'irrecoverable VAT' in the profit and loss account. Start the new accounting period correctly

    3 Journal out the credit balance on the control account to individual expenditure lines by fairly apportioning the VAT due to that expense. Keep a record of you calculation. Then correctly account for VAT for future transctions.

    I took option 3, my client also had drawings as an expense.

    Additonal problems that you may have, as I did, is that this may go back a couple of years and affect your clients business tax computations and tax returns and even though you correct the data base then expenditure will have been understated and your client may well have paid too much tax, as mine had.

  • yves
    yves Registered Posts: 28 Regular contributor ⭐
    Thanks poodle

    i have decided to do a journal just using one date to rectify

    thanks for reply


Privacy Policy