VAT Logging Queries

Welcome to the Community space, @cossyuk.

I have some information to help you figure this out. 

You'll need to review the transactions presented on your VAT Control account. Once you've marked them as filed, the amounts will be transferred in VAT Suspense. 

Next, when you run the report, be sure to only select the dates that have already been filed. Those periods that weren't filed won't be reported to your VAT Suspense liability. Also, run a VAT Exception report as this may also cause the imbalance in both accounts.

It's also possible that the figure is higher than it should be because of the accounting method used. 

You can check this out and get back to me if you have follow-up questions. I'll be around to help. Wishing you a safe and productive rest of your week.

Hi,

Thank you for your response.

Looking at what you have said, the transactions present in the VAT Control account in terms of decrease are fine, it is logging expenses as they are being paid. However in terms of increase, it is automatically logging the VAT from every invoice created as it is being created (accrual), rather than only logging the VAT when the invoice is paid (cash).

In the tax section, the amount showed for collected on sales is correct and matches only what has been paid over to me in the period, and the amount showed for paid on purchases is also correct.

As you stated, when I do file the VAT return, the final amount for the period gets moved from VAT Control to VAT Suspense, the VAT Suspense then gets balanced when the direct debit payment is made to HMRC. But VAT Control is never showing the correct figure as it is treating increases on an accrual basis whereas the rest of quickbooks is processing everything as cash basis.

Hi cossyuk

Do you have the taxes settings set to cash as well as within the account and settings > advanced section?

Hi John,

In the advanced section under accounting I have accounting method as cash, this seems to be the only option where cash is available to choose.

I am wondering if it is something to do with the company type tax form option? When I first set up I was instructed by a QuickBooks operator to select partnership or limited liability company. I thought I would need sole trader as we are a partnership that acts effectively like sole traders. We file a partnership tax return and the profits from the partnership are then split between us and we declare these as our income on our individual self assessments. But the operator was adamant it was the partnership/limited liability option I would need.

The only other place I can find an option to select cash is in the Taxes> Edit VAT section where the VAT accounting scheme is set to cash. 

Thanks.

Hi Cossyuk

Those are the only 2 places that affect whether the accounting is reporting as cash basis and then that the VAT is reporting as cash.

As regards the original payment which you put to VAT suspense which was not a return done through QuickBooks it would be a case of deleting that and then creating an expense and creating an expense account to post it to as a one of for this circumstance.

If the VAT control is incorrect in terms of reporting we would really need to look at the figures themselves are you able to attach a screenshot to your reply.

Thanks

Hi Emma,

I have attached a screenshot of invoices from 11th March to this reply and will attach the VAT Control account for 11th March underneath as I can only seem to add one attachment.

As you can see only 2 invoices have been paid so far; Invoice 20420 and Invoice 20424. These were actually paid on 23rd March and 16th March respectively, so I would have expected the VAT on those invoices to go into the VAT Control account on those days when payment was received.

As you can see on the VAT Control account, it is automatically adding VAT from all invoices as they are being created, all invoices created on the 11th have been added sequentially on the 11th. Expenses seem to be working fine as the 3 expenses that have gone into VAT Control on the 11th were logged as paid on the 11th.

Any help you can give would be appreciated.

With regards to the VAT payment for the return not done from QuickBooks, if I create an expense account for it will it not then show up in my profit and loss report and subsequently make that incorrect rather than the balance sheet?

Many thanks.

I appreciate you for performing the recommended solutions and providing us a screenshot, cossyuk.

If you record the payment you've made to HMRC for the VAT Return filed outside of QuickBooks, you can create an Expense account. The expense transaction will be posted in the Profit and Loss report under the Expenses category. 

To create an Expense account, here's what you'll need to do:

1. Go to Accounting from the left navigation menu.
2. Tap the New button at the upper right hand.
3. Choose Expenses for the Account Type, then select Taxes Paid for the Detail Type.
4. Enter a Name for this account.
5. Tick Save and Close.

Here's how you can create an expense transaction:

1. Click the Plus (+) icon at the top.
2. Choose Expenses.
3. Enter the necessary information.
4. In the Category details section, select the Taxes Paid account for the Category, Description, Amount, then select No VAT for the VAT column.
5. Tap Save and close.

Then for the VAT invoices not logging into the VAT Control account, I'd suggest contacting our Customer Support Team. They'll pull up your account in a secure environment and investigate what's causing this issue.

You can either sign up for our callback process or chat directly with a support agent. Here’s how:

1. Go to Help at the top.
2. Tick the Contact Us link.
3. In the What can we help you with? window, enter contact support in the field box.
4. In the Choose a way to connect with us section, select Chat or Get a callback.

I have a link here that provides you with articles about managing VAT: https://quickbooks.intuit.com/learn-support/vat/misc/02/uk-vat?label=QuickBooks%20Online.

I'm just one reply away if you need a hand with running VAT reports or any QBO related. Wishing you and your business continued success. Take care always.