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Claiming vat back

Hollycowley_28Hollycowley_28 Registered Posts: 29
Please can I have some help, I am a purchase ledger at my work. When my directors gives me invoices for things he has brought personally for the shop and he wants to claim the vat back. Do I put on my purchase ledger side or do I give to the general ledger to claim the vat back? Can you get vat back from purchase invoices that you have put onto the purchase ledger please help! Thank you.

Answers

  • CheesypeesyCheesypeesy MAAT Posts: 102
    The gross amount should go to the purchase ledger, with the net amount and VAT being recorded in their respective general ledger accounts. The VAT on the invoice will reduce the VAT owed to HMRC, effectively claiming the VAT back in the next return.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
    Hollycowley_28
  • Hollycowley_28Hollycowley_28 Registered Posts: 29
    > @Cheesypeesy said:
    > The gross amount should go to the purchase ledger, with the net amount and VAT being recorded in their respective general ledger accounts. The VAT on the invoice will reduce the VAT owed to HMRC, effectively claiming the VAT back in the next return.

    Thank you! Does this mean when putting the purchase invoice on sage and putting the vat in, as soon as this is paid the net will go to purchases account and vat will go to vat control account resulting in reclaiming the vat?
  • CheesypeesyCheesypeesy MAAT Posts: 102
    No problem! The net and VAT will go to their accounts straightaway once you enter the invoice. This is so the financial statements follow the accruals concept.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
  • Hollycowley_28Hollycowley_28 Registered Posts: 29
    > @Cheesypeesy said:
    > No problem! The net and VAT will go to their accounts straightaway once you enter the invoice. This is so the financial statements follow the accruals concept.

    I have never actually done a vat return. We use sage, will my manager use all vat that I put for purchase? Also what do you mean by that is done for the accruals concept? Thank you.
  • CheesypeesyCheesypeesy MAAT Posts: 102
    The VAT on purchase invoices you enter should automatically go to the VAT control account, as will VAT on sales invoices. Though my knowledge on Sage is rather limited, that's been my experience with the finance systems I've used. The balance for the period the VAT return covers will be the amount due to or from HMRC.

    You can then submit the return on the HMRC website. The resulting payment or refund will clear the balance for that period (Cr/Dr Bank, Dr/Cr VAT control account).

    By the accruals concept, I mean income and expenditure should be recorded in the period it relates to. Since the purchase relates to the current period (I assume) then it should be reflected as such, regardless of when the invoice is settled.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
    Hollycowley_28
  • Hollycowley_28Hollycowley_28 Registered Posts: 29
    > @Cheesypeesy said:
    > The VAT on purchase invoices you enter should automatically go to the VAT control account, as will VAT on sales invoices. Though my knowledge on Sage is rather limited, that's been my experience with the finance systems I've used. The balance for the period the VAT return covers will be the amount due to or from HMRC.
    >
    > You can then submit the return on the HMRC website. The resulting payment or refund will clear the balance for that period (Cr/Dr Bank, Dr/Cr VAT control account).
    >
    > By the accruals concept, I mean income and expenditure should be recorded in the period it relates to. Since the purchase relates to the current period (I assume) then it should be reflected as such, regardless of when the invoice is settled.

    Thank you so much!
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