Question regarding VAT postings in accounts

Rae_Rae

Hi,

Sorry this is another question to try and refresh my knowledge after taking over from someone else at my company for some accounting duties.

We are not VAT registered, however, do the invoices we receive from suppliers still need to be posted into the accounts as NET and VAT figures?

They have just been posted at the gross total of the invoice by my predecessor and I wanted to make sure that this was correct as I'm struggling to remember without digging out all my study notes.

Thank you.

davealucas

@Rae_Rae post them as gross amounts. As the company is not registered for VAT, it cannot recover anything paid out so it is a cost to the company.

shamilkaria

Hi @Rae_Rae

As the company is not VAT registered, you can not reclaim the VAT back and so the total cost will go to the company. So when you are posting the invoices on your accounting software you will be using the "Gross" amount.

Hope this helps.

Kind regards

Shamil