We work on the VAT Margin Scheme and we have external software that calculates the figures. How can we create a general Journal with a line for the VAT Liability?

Hello Pottyponder, 

Welcome to the Community page, 

The external software will have created a journal which you would be able to copy into your Quickbooks account, We are not trained accountants, therefore, can not advise how to do this, you would need to speak to an accountant about how to record this in a journal in Quickbooks. 

If there is any accountant that knows how to do this, please feel free to comment on this post.  

That's what i'm trying to do, I have the journal entry from the software that has one line for NET sales and another line for VAT.  Unfortunately it won't let me post directly to the VAT Liability Account.  

Does anyone know a work around?

Many Thanks 

Paul.

Just stumbled across this while looking for an app that handles the margin scheme. Can you process your journal as a dummy sales invoice?

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@Pottyponder wrote:

That's what i'm trying to do, I have the journal entry from the software that has one line for NET sales and another line for VAT.  Unfortunately it won't let me post directly to the VAT Liability Account.  

Does anyone know a work around?

 

Many Thanks 

Paul.

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As long as a 'dummy' invoice not for the client to see!

Add item at cost price, nil vat.

Add margin less vat content (16.67%) then make it subject to 20% sales vat. Vat margin calculated.

Probably not correct to HMRC guidelines but as long as invoices match to original can't see it as a big issueand it works!

just read this post as we are in same situation being in the motor trade dealing which involves the  VAT margin scheme - sorry but this advice flies in the face of the new MTD regs  coming in April 2022.

and  therefore will  NOT compliant or acceptable.

We have looked at Quickbooks to help as a solution but there seems to be no provisions to accept our existing margin scheme software -anyone have any thoughts or where to  go or what to try next ? we currently use Motor trade Assistant -many thanks Simonjude-Hubers Garage

I am currently looking in to MTA as we need the vat margin scheme facility. 

How do other used car dealers process their payable margin vat. 

I am making and general journal entry at the end of each 1/4 before filing the return by MTD. 

Any help or advice would be greatly appreciated. 

we are in a similar situation -until QB has the correct software to cope with Margin Scheme inputs we are just importing our Margin Scheme for each qtr and using a self billing invoice system like the old days !! this will work and as long as you have all the back up information showing on the  Self billing invoice under notes this is the only way forward at the present time - hope our hard earned knowledge helps you !!

Thank you for taking the time to reply I really appreciate it. 

I have sent a direct email over. 

I have been having the same problem with some of our sales, but found a video explaining what to do. This works well if you are not sending invoices to your customers, so this is really just for recording the sale receipt in QBO. I appreciate that for some, it will not be practical. 

Essentially follow these steps:

1. Create a new VAT rate called something like "VAT Margin Scheme" at 16.67% for Sales and save
2. Create a new Product/Service - Service called something like "Original Cost" - No VAT and save
3. Create a new Product/Service - Service called "Profit Made" - 16.67% VAT (tick the tax inclusive box) and save
4. Create a new Product/Service - Bundle called something like "Margin Scheme Sales Product" (you can always be more specific in the description). Select from the dropdown list "Original Cost" for the first line and the second line "Profit Made" and save.
5. When entering a relevant sales receipt, enter the Bundle name, in this case "Margin Scheme Sales Product" in Product (it will recognise what you're typing in). There will be two sections to the sale. First put the original cost in (excluding any subsequent repair/upgrade costs) and then enter in the profit. The selling price will populate automatically. Scroll down to the totals where you will see the 16.67% calculations and the VAT liability. Save

Hope this helps. I'm sure there is a video covering invoices, but we don't use them for these particular occasional sales so did not need to watch it. I'm guessing if you do use this system for invoicing, your margin will show to the customer!

Hello Community Users, we just wanted to pop in and update this thread with the current stance on VAT Margin schemes and Quickbooks Online. 

Vat Margin Schemes are currently not supported in Quickbooks Online, you would need to calculate your  return outside of QBO, you can use the QBO figures to help, and then you can submit the return in Quickbooks via spreadsheet.

We recommend consulting an accountant to guide you in managing these transactions. If you don't have any, you can visit our Accountants Near Me page to find one.