I started to use quickbooks online last month to get ready for MTD, having used a basic version of sage for the past 25 years. The problem that I have at the moment is that I have completed a VAT return on sage, manually submitted it to the HMRC and then made the payment. The payment having been made in the current quarter and having been entered on quickbooks as an expense on the VAT Suspense account. This has made the bank balance correct, but I now show a negative figure in the VAT Suspense account. How do I correct this?
I also have some expenses payments that where entered on sage but did not get included on the VAT return. These will need to be included on the quickbooks VAT return for the current quarter.
Can I make manually adjustments on quickbooks online to correct the total for the VAT return, but not effect the profit and loss accounts?
I'd definitely recommend getting a qualified accountant to take look, if my advice doesn't help you to solve it on your own. I don't think there's any particular error with your account, no technical fault; but, you do need to enter an opening balance for your VAT Suspense Account. You can do this with the use of a Journal Entry. If you're confident in your double entry accounting, great, if not, this is where I'd have to direct you to an accountant.
For the manually including the expense payments, you can adjust the boxes on your VAT Return, but we normally don't recommend this without again, an Accountant, or HMRC's clearance.
One option, is to set your first return period for a day, mark it as filed, and then add the expense payments in, for the correct date. This will spit out an exception report which is our systems way of telling HMRC "I missed these off a previous return" or to make HMRC aware of a correction. These are valid exceptions as they were missed on the previous VAT Return. You can confirm with HMRC that they are happy for you to send exceptions and corrections to them for the prior period in this manner.
I'd rather be cautious and ensure i get you to check with the correct authority in this, than be brash about VAT!
Please let me know if you need me to elaborate on any of these points.
Thanks for the reply. I have been using journal entries for past 25 years, so understand how they work, it's just a case of making sure everything goes into the correct area and that it debits and credits the way you need. This was always a problem with sage, if you did not get it correct first time you would then struggle to put it right. Having used quickbooks online for about a week I have found that editing entries is quite easy, hence I will give it a go.
The current VAT quarter does not need to be done through MTD, having read your reply it may be easier for me to submit the return manually making the adjustments. As I have not setup MTD yet I could then make the adjustments in quickbooks, run a return to reconcile the VAT and setup for MTD later. Would this work?
Hi Silo Sean
As you have not registered for MTD with HMRC you will still be able to make adjustments in QuickBooks and either submit your VAT return or mark it as filed and manually enter the figures at HMRC.
Dear John C,
Again, thanks for the reply!
I take it that by making the adjustments and marking the VAT return as filed, it will mark the transactions/entries as reconciled for VAT so that they do not effect the next quarterly return?
Hi Silo Sean
Once you have marked a period as filed the transactions within that period will not be affect your next quarter. However if you have made an error with any of the transactions in the filed period, e.g. that you have included an invoice/expense in error and you delete the transaction it will appear as an exception in the current open return, either increasing your liability if you deleted an expense or reducing your liability if you delete an invoice.