Help with Sage Line 50

lv9783

Ok so I have inputted all the invoices and credit notes for customers and suppliers and reconciled the bank account.
I now have to do a vat return in sage...Ive never done one before, can anyone guide me on how to do this and how do i know if the figures are correct?

Secondly, one of the customers have given a CN which does not contra any invoice instead it was just paid via bacs from the Bank.
I know usually to handle a credit note..you mark it off against invoices but how do you handle this situation...I thought of journal but that will only be CR Bank DR Debtors Control Account not the individual customer.
Any ideas?

Cheers will be a big help

AK002

I can't tell you exactly how to do it as i don't have access to sage at this moment in time but..

to run a VAT return you go Modules -> Financial -> then the VAT return button at the top, input your dates and click run, then print the detailed report & check it.

you would post the credit note to the supplier and then in Suppliers tab there is a Wizards (i think) option and it lets you refund a credit note to the bank.

HTH.

lv9783

i know sounds really silly but havent yet done the module in yr 2 of aat for vat...how do check if its correct once you have printed it off eek sorry

i have no idea why they have credited a customer with a credit note when nothing was bought from them so yes i assume it was a supplier and then that would make sense???

thank you has had me stumped for weeks lol

lv9783

ah no its cool i get it you go to the refund wizard and mark it off againt customer credit note...thank you so much

Ian

lv9783 wrote: »

Ok so I have inputted all the invoices and credit notes for customers and suppliers and reconciled the bank account.
I now have to do a vat return in sage...Ive never done one before, can anyone guide me on how to do this and how do i know if the figures are correct?

Secondly, one of the customers have given a CN which does not contra any invoice instead it was just paid via bacs from the Bank.
I know usually to handle a credit note..you mark it off against invoices but how do you handle this situation...I thought of journal but that will only be CR Bank DR Debtors Control Account not the individual customer.
Any ideas?

Cheers will be a big help

Wow I can actually help with this one! Right anyone using an older version of sage will know that there is no wizard to do a customer refund.
To do this you have to raise an invoice in the customer account and make the nominal code "9998". Now you have a balance in the nominal which will need to be reversed so to do this you will raise a purchase invoice to the sales ledger contra account (open one in the P/L if you don't have one) then raise a supplier invoice to 9998. This then moves the balance on to the P/L. To reverse this just make a normal supplier payment through the bank that the refund went from. This then clears the balance and its all correct. Shout if I need to re explain as typing this without reading through!

Jan

I typed in Sage help and it came up with this:-

At the end of the first month, open the Company module, then from the Tasks pane, click Manage VAT.

The VAT Ledger window appears.

2. From the VAT Ledger window toolbar, click VAT Return.

The VAT Return window appears.

3. Enter the VAT Period dates in the For the period and To boxes.

4. To calculate the VAT due for the period, click Calculate.

Do not select the Include Reconciled check box.

At this stage, you may be prompted that there are unreconciled items before the specified period and the program will ask if you want to include them in this VAT Return. These unreconciled items will be late entries from a previous accounting period that have not been included on a previous VAT Return. You should include them on this return by choosing Yes.

Print both the Summary and Detailed VAT Reports. To do this click Print, choose the report types from the VAT Return Report window and then click Run. Retain these reports for audit purposes.

5. You are now ready for the first stage of reconciliation and should print the following reports:

Sales and Purchase Invoice and Credit Note Day Books

Bank Payments and Receipts Day Books

Cash Payments and Receipts Day Books

Credit Card Payments and Receipts Day Books

Nominal Day Book

Nominal Activity Report for both Sales and Purchase Tax Control accounts

EC Sales List, if applicable

6. Compare the figures on the reports printed in step 4 with the figures on your VAT Return.

If you do not have your tax control accounts split and have just one tax control account for the tax of all sales and purchases, you must compare your VAT Return with the relevant daybooks.

Note: If the figures do not match, use the Summary and Detailed VAT Reports to investigate the discrepancies. See VAT Questions for more help.

7. When you are sure that the figures are correct, take a backup of your data; now run the VAT return again, this time clicking Reconcile.

You should now clear your VAT control accounts, so that the balances in these accounts are always unreconciled and current.

8. Post a journal entry to transfer the balance from the Sales and Purchase Tax Control accounts to the VAT Liability account. For example, if the balance on the Sales Tax Control account was £200, and the Purchase Tax Control account was £100, the following journal entry would be posted;

Account
Tc
Debit
Credit

2200 Sales Tax
T9
200


2202 VAT Liability
T9

200

2201 Purchase Tax
T9

100

2202 VAT Liability
T9
100


This will put a credit balance of £100 on the VAT Liability account, which should equal the figure in Box 5, showing that you owe £100 to the relevant tax authorities.

Alternatively, you can use the VAT Transfer Wizard to post the values.

You have now reconciled your VAT return for the first month.

9. For months 2 and 3 you are going to follow the same steps as in Month 1. When you run the VAT Return in step 1, it may be reported that several unreconciled transactions have been found from before the specified date range, and do you want to include them? You must include these, as they will be late entries posted after reconciling Month 1.

10. When you have the VAT Returns for three months generated by Sage 50 Accounts, all you have to do is add the Box totals together from all three Returns and copy these to your actual VAT Return form to send to the relevant tax authorities.

When you come to pay the bill, post a Bank Payment, (or Bank Receipt) against the VAT Liability Account. This clears the balance of your VAT Liability Account and you are ready to begin your new quarter.

You have now completed your VAT Return reconciliation

AK002

I've never done the Journal entry thing on sage for VAT, always get cleared out at the year end with opening balances anyway...

Bluewednesday

one important question, I take it you are invoice accounting not cash accounting?

lv9783

I should really no this but a bit out of practice...whats the difference between cash accounting and invoice accounting?

Bluewednesday

Cash accounting is where the VAT is paid over when the sales invoices are paid and the input VAT is reclaimed once they are paid.

Invoice accounting is where it is done via the invoice.

It will make a difference which scheme you are on as to what checks you need to make.

If it is a big company it is likely to be invoice accountign and the checks that Jan has mentioned are what you should do.

However if you are cash accounting the bank will need to be checked.

You can find out by looking at the company settings on sage or if you run the VAT reports you will see if they are in invoice number order or bank receipt order.

lv9783

I am cash accounting I have printed out the report...what do i need to check against?
Thank you for your help

Bluewednesday

You then need to check the report against your bank account, to make sure everything is included.

Have you reconciled the bank, this is quite important really if you are cash accounting?

lv9783

Yes I have reconciled the bank...I know seems stupid questions but its my first VAT return and scared of getting it wrong lol

Bluewednesday

You're not asking stupid questions. What would be stupid would be just blindly accepting the figures without checking them!!

lv9783

Ok so Im faced with now that its on a cash accounting basis...
I have just put this onto sage so I have invoices Ive put on in the previous period...however they were paid this period, does this mean I enter the invoices pre period as t1 and the payment as t1 as it would have to be included in this vat return or do i put the invoices on as t9 but the payment as t1?

Bluewednesday

Why are you putting a t code on your payments, are you paying through the supplier/customer option?

Other than that you don't really need to worry about things going into periods because Sage sorts it out for you - as long as the last VAT return was reconciled

lv9783

I put the payment through bank and customer/supplier...so basically even if it is pre period, I should just put the invoices on as t1 then the payments will be automatic for tax
I think I understand now :-)

AK002

lv9783 wrote: »

I put the payment through bank and customer/supplier...so basically even if it is pre period, I should just put the invoices on as t1 then the payments will be automatic for tax
I think I understand now :-)

That's correct.

T9 = exempt from VAT, i.e. you won't see the figure at all on the VAT return

T1 = VATable and you'll see VAT & net expense/sale in the return

T0 = No VATable but you'll see the expense on the return..

lv9783

Help

this is turning into a nightmare and think im totally messing this up.
I originally put the invoices on from the last period as t9 as they have already been done.
However since i found out we are cash accounting rather than standard ive changing them to t1, t0 etc.
But now the bd figures are out and its building up in the suspense account?
Where am I going wrong eek

Bluewednesday

if you pm me and you don't mind, it might be worth you emailing me a couple of reports so that I can try and help, obviously I would respect confidentiality!

lrhem

I dont know if you are sorted yet but if not I hope this helps. Try and keep it simple. Its very easy to overcomplicate it.

When you enter a supplier invoice and it has VAT on you add T1 for a tax code. If it doesnt include VAT enter T0 and if you are entering or making a Tax exempt payment Wages etc) its T9. On cash accounting when you go to Bank, Supplier to pay a bill you dont need to enter a tax code it automatically enters it according to the code you entered the bill with. When you have paid the bill it will appear on the VAT return. At the month end or quarter end you can check the transaction on the VAT detailed print out. Just check its in the right section - ie T1, T0 (T9 wont be on it) ( you will become familiar with regular payments) and check tax amounts look right.

When you raise customer invoices, if you are VAT registered you will generally add T1 as a tax code unless it is exempt supply. When you post a payment using Bank, Customer you dont need to enter a tax code, it enters it automatically according to the code you entered on the invoice, it wont let you post a payment using a different VAT rate to the invoice which could only generally arise if you were posting a payment on account to an invoice. When you have posted a payment it will then appear on the VAT return.

For a Bank Payment you will need to enter a tax code. If its Wages its T9. If you are paying something with VAT on it will be T1. If its say milk or coffee it would be T0.

With Cash Acounting the VAT return picks up receipts and payments in the period you made them. It doesnt matter what date the invoice was put on. Its the date you received/paid/posted the cash.

Each month, print the detailed tax report and just check things are in the right sections. T1, T0, etc and the tax amounts are right.

Hope I havent over complicated it. :-)

lv9783

You are all stars..I get it now...Im in work tomorrow and Ill update it..
Thank you so much...I love the aat forum lol

lv9783

Oh just one more thing, not sure if this has already been anwered but the brought down figure will be partly sales and partly tax...the sales or purchase part has gone into the suspense account but where did the tax go?
Into the sales tax account?

Then I have this issue as an example
brought down from year before:

inv 1 = £40sales £6tax
inv 2 = £60 £9tax

brought down figure is £115 (total of all invoice 1 and invoice 2) this is the figure that has been given to me from last years trial balance

so i enter the invoices in as above, putting tax as t1.
However, into the suspense account is £40 and £60 = £100 and the £15 has gone....? into the sales tax account???

however when i enter all the balances from last yrs tb i put the debtors control account as 9998 (suspense) but all of it 115 so im still left with £15 in the suspense account...how do i clear this...or have i made an error earlier?

sorry very complicated or maybe i am just over complicating it lol