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VAT Adjustment

sjkrsjkr Feels At HomeMAAT, AAT Licensed Accountant Posts: 74
Hi,
I have taken over a new client, ltd company. Whilst doing their year end, I discovered that I need to put through an adjustment to credit the VAT account to show what was owed. Which Sage code should I use for the debit entry?
No year end was run on Sage for the previous year, the previous accountants opening balances did not correct the VAT account, and I think I have overthought the whole thing and confused myself!

Thanks in advance!

Comments

  • CeeJaySixCeeJaySix Well-Known Registered Posts: 645
    All depends where the error is! Has output VAT been included in sales rather than going to the VAT output nominal (eg. invoices coded T0 or T9 in error)? Has input VAT been over-claimed (ie. expenses understated)?
    Jawz
  • sjkrsjkr Feels At Home MAAT, AAT Licensed Accountant Posts: 74
    Thanks, think I've sorted it!
  • JawzJawz New Member West MidlandsRegistered Posts: 53
    Agreed CeeJaySix, however*input vat over-claimed would means expenses are overstated or sales understated...
  • CeeJaySixCeeJaySix Well-Known Registered Posts: 645
    I was working on the basis that if you've over-claimed input VAT (claiming where you shouldn't have eg. exempt purchases, wages, or even on VAT payments - all of which I've seen from clients), if the gross amount was correct then the expense will be understated (ie. expense is recorded net of the incorrect VAT when it should be gross as there is no VAT). But I see your point if you've claimed too much input VAT you may have simply overstated the gross expense.
    Jawz
  • JawzJawz New Member West MidlandsRegistered Posts: 53
    Yep, I totally agree. I see your point too, brilliant point actually :) ...Thank you.
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