How to clear down any previous VAT liability before submitting a file for current bill

noko60 · ‎March 24, 2019

We previously only used Quickbooks to push out invoices and to produce statements at the end of each month. As we did our book keeping manually.

Because we now have to submit our VAT digitally, I have been entering our bills etc. into quickbooks. However because we have never submitted any previous files to HMRC and have never closed the accounts each year and never entred any of our bills before; Quickbooks is showing a VAT liability of £1000000's.

Can anyone help to gid rid of this amount and let us file this quarter only.

Kind Regards

john

TaliaI · ‎March 25, 2019

Hello John,

Your options are journalling that VAT liability out - however you will have to create an account within your Chart of Accounts to post this to. If you choose this option, we advise that you speak to an accountant as we will not be able to tell you what type of account to create, or how to record this correctly. Another option would be to create a new account and start from scratch - this would then allow you to go forward from now recording all your transactions with the correct VAT liability.

Again, you would be best speaking this through with an accountant to see what they suggest.

My colleague was asking what the VAT liability account is named? If it is the accounts that the system creates, it will either be named VAT control or suspense.

Thanks,

Talia

View solution in original post

EmmaM · ‎March 25, 2019

Hello Thanks for your question

Just to confirm regards the VAT filing itself have you done anything in the taxes section for example have you been marking periods as filed in the QuickBooks or are you in your first period?

If you are in the first period then you can enter the dates of your first quarter and it will pull through transactions in that period to file correctly

In regards to the VAT liability account is this the VAT control or VAT suspense account?

Thanks

Noko · ‎March 25, 2019

Hi Emma,

As already explained we have never ever used Quickbooks for accounting, but we are being forced into having to use it to make our VAT return.

Because we have never used the accounting side, the accounts were never closed down at the end of each year; and we have been using it for approx 6 years. Therefor the program is saying there is over a million pounds worth of VAT liability.

I have entered in the last quarters bills and paid them however we need to find out how we can capture the current quarter's VAT given there is a liability of over a million from the 6 years of previous accounts.

I am unsure of which account the VAT liability account relates to ie. is this the VAT control or VAT suspense account?

Regards

John

TaliaI · ‎March 25, 2019

Hello John,

Your options are journalling that VAT liability out - however you will have to create an account within your Chart of Accounts to post this to. If you choose this option, we advise that you speak to an accountant as we will not be able to tell you what type of account to create, or how to record this correctly. Another option would be to create a new account and start from scratch - this would then allow you to go forward from now recording all your transactions with the correct VAT liability.

Again, you would be best speaking this through with an accountant to see what they suggest.

My colleague was asking what the VAT liability account is named? If it is the accounts that the system creates, it will either be named VAT control or suspense.

Thanks,

Talia

BJJJ_Ltd · ‎January 31, 2021

I have a similar but not so exaggerated issue. We DO use QB desktop for account, have done for last two years But this VAT return is showing the "Balance" including the last Quarters totals. The Amount Column next to the Balance when VAT Detail Report is run for the last Quarter shows correctly but the Balance is just over double what has spent, owed, purchased etc. I checked and the differences are exactly what was on the previous Quarter.

I need to clear it down before Submitting VAT MTD and the accountants are not available for advice. Anyone around to respond today? I have seen the Journaling option but never did it myself - The owner has been sequestered and the Accountant - well its Saturday.

HELP Please - [email address removed]

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How to clear down any previous VAT liability before submitting a file for current bill