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Old Invoices, SAGE and VAT

RustleRustle Just JoinedRegistered Posts: 4
Hi

At work my MD gave me an invoice that is over a year old and which belongs to a previous financial year. I want to reclaim the VAT from this invoice. Which is the best way to post on to SAGE, please?

Comments

  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,042
    Rustle wrote: »
    Hi

    At work my MD gave me an invoice that is over a year old and which belongs to a previous financial year. I want to reclaim the VAT from this invoice. Which is the best way to post on to SAGE, please?

    Depends on:

    1) When the invoice was paid? E.g. If the invoice has already been paid in a previous period then should you even be posting the invoice? A VAT adjustment may be more suitable.

    2) What type of VAT scheme do you operate (Cash accounting or invoice-based accounting)? For example, if you operate a cash accounting VAT scheme then entering an old invoice will not make a difference (especially if that invoice has already been paid in a previous period).
  • RustleRustle Just Joined Registered Posts: 4
    Thanks.

    The VAT scheme is invoice based and the amount of the invoice was paid to the supplier without the invoice. The invoice has never been included in a previous return.
  • coojeecoojee Experienced Mentor Registered Posts: 794
    Rustle wrote: »
    Thanks.

    The VAT scheme is invoice based and the amount of the invoice was paid to the supplier without the invoice. The invoice has never been included in a previous return.

    I'd post it in this year dated the first day of the year. You can't put it into the correct year as presumably that year is closed off and accounts submitted to Co House etc. When you run the VAT return include earlier unreconciled and it will then show up on the return.
  • readerreader Experienced Mentor MAAT, AAT Licensed Accountant Posts: 1,042
    coojee wrote: »
    I'd post it in this year dated the first day of the year. You can't put it into the correct year as presumably that year is closed off and accounts submitted to Co House etc. When you run the VAT return include earlier unreconciled and it will then show up on the return.

    I'm not entirely convinced that the invoice should be posted at all.

    When the payment for the invoice was made did the payment go to the supplier as a payment on account (in this case I would post the invoice on the 1st day of the new period as per coojee) alternatively if the payment went directly to purchases (or any other expense account) then by posting the invoice you'll be doubling counting the expense (once as a payment and once as an invoice; in this case I would just post a journal in order to adjust for the VAT).
  • coojeecoojee Experienced Mentor Registered Posts: 794
    reader wrote: »
    I'm not entirely convinced that the invoice should be posted at all.

    When the payment for the invoice was made did the payment go to the supplier as a payment on account (in this case I would post the invoice on the 1st day of the new period as per coojee) alternatively if the payment went directly to purchases (or any other expense account) then by posting the invoice you'll be doubling counting the expense (once as a payment and once as an invoice; in this case I would just post a journal in order to adjust for the VAT).

    Yes, sorry, I was assuming nothing had so far been posted. If the payment has been posted then you need to check whether there was VAT on it when it was posted in which case do nothing. If there was no VAT on it then just journal the VAT from the expense to the VAT account.
  • RustleRustle Just Joined Registered Posts: 4
    Thanks for your replies.

    The payment was made as a payment on account to the supplier. I tempted to raise the invoice in this financial year and only include the VAT total.
  • coojeecoojee Experienced Mentor Registered Posts: 794
    Rustle wrote: »
    Thanks for your replies.

    The payment was made as a payment on account to the supplier. I tempted to raise the invoice in this financial year and only include the VAT total.

    You've got to include all of the invoice (ie the net as well) otherwise there will always be an overpayment on the suppliers account and your expenses will be understated (you haven't included a valid expense in the accounts). The fact that it's for a prior year is neither here nor there really. Of course if it's material then you need to disclose it but the odd hundred quid here and there isn't going to be queried by anyone.
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