VAT returns using only bank payments, not purchase invoices?

Londina

Do you find correct to do a VAT return by not posting all the purchase invoices of the period, but just go through the bank payments and post that transactions instead?

I have never seen something like that before!! What about invoices that have not been paid yet?

Bluewednesday

are they on cash accounting?

Londina

nope, normal VAT return!

Bluewednesday

Yes but are they on the cash accounting scheme? VAT returns are done that way for the cash accounting scheme, it wouldn't show anywhere but on the VAT workings

Londina

Bluewednesday wrote: »

Yes but are they on the cash accounting scheme? VAT returns are done that way for the cash accounting scheme, it wouldn't show anywhere but on the VAT workings

No, they are not on cash accounting, that's why I'm wondering about it! the manager says it's ok to do in this way, but I have my concerns..

deanshepherd

It sounds like they are cash accounting their expenses but normal accounting their income. I believe it happens a lot with small businesses. I don't think HMRC particularly care because it is a cash flow advantage to them.

Londina

deanshepherd wrote: »

It sounds like they are cash accounting their expenses but normal accounting their income. I believe it happens a lot with small businesses. I don't think HMRC particularly care because it is a cash flow advantage to them.

Yes, they do account normally the sales by posting all the invoices, however the purchases ones are by the bank transactions. Is this type of VAT return called too "cash accounting" therefore?

Anyway I worked with so many clients and I have never seen something like that!

deanshepherd

I would call it half 'n' half!

In the words of Whitney Houston.. 'It's not right, but it's ok..'

PGM

deanshepherd wrote: »

I would call it half 'n' half!

In the words of Whitney Houston.. 'It's not right, but it's ok..'

That term could cover a huge aount of accountancy work done!