So I am struugling to understand the whole vat suspense control thing?
I have a payment recorded in banking to hmrc when I want to put it into quickbooks what category do I select do describe this payment?
i am new at using quick books
i have a query like the person above regarding VAT suspense
I am sure that the VAT filer has produce the suspense account, I have reconciled but I need to clear my suspense account out.
My payment have been made to VAT paid
can you please let me know how to clear my suspense account out please
If you are using the online product any transaction that you post VAT codes against will post to the VAT control account. When you mark as filed in the taxes section the transactions in the control account which are within the date range that you have filed will be transferred to the VAT suspense account.
When you then pay HMRC the amount that was due for the period you filed you will then record payment in the taxes section, confirm the bank that the payment was made from, select the date that the amount was debited from your bank account and then confirm the amount and save.
The amount will then be debited from the suspense account and credit your bank account.
If you have done the above and there are remaining amounts in the suspense account they may relate to any amounts that have not been paid (record payment).
Could you clarify on this for me - I have a client new to QB's, we've just added the bank data and in it was his last quarters VAT payment to HMRC. This return won't be in QB's so what would category would I classify the payment to HMRC under, is it the VAT control account?
As the VAT quarter has already been accounted for the payment relating to it will have to be created as an expense and you will, just for this payment, create an expense account and name anything you like.
The VAT control account and suspense accounts are both liability accounts. When you create a transaction and allocate a vat code, apart from No VAT, it will be allocated to the VAT control account. When you mark as filed/submit to HMRC the VAT period from within the Taxes section, the transaction in the VAT control account for that period will be moved to the VAT suspense account and then when you record a VAT payment, from within the Taxes section, for the period you have just filed the transaction will be moved fromthe suspense account to the bank account.
Going back to your answer about recording the payment of VAT and the date paid, you said that It will DR VAT suspense and CR Bank. Will this not clash with the automatic bank feed of that accounts? Could you please shed some light on this? As usual thanking you in advance for your reply.
To avoid duplicating the entry, if you have the banking connected then you will need to record the payment against the filing in the taxes screen first and then this will offer a match when the transaction appears in the For-Review tab.
If you have added the transaction in from the bank before recording the payment, you can undo the payment added in the Reviewed tab to match.
Thanks for joining in on this thread. You should not directly allocate a transaction to the VAT control account by selecting this as a category on the transaction, instead assign the correct VAT code to the transaction on the banking screen and this will automatically post to VAT control account.
Please let us know if you have any further questions,
Replying to Gordon`s answer: How do I clear the VAT accounts? Are they supposed to net to zero after every period? In that case, should I enter a journal for eliminating the balance from the Control account once I do the filing or when I get a refund or pay the VAT depending on whether I purchased more/less than the sales?
Transactions with a VAT code will be populated in the Control account. When the period is filed the amount is journaled/transferred to the suspense account. Ideally the Control account will be zero after you have filed the period however it only clears the control account of amounts that are within the period that you filed. If you have entered historic transactions before you initially started filing they will never be cleared from the control account.
Recording a VAT payment using the taxes section, which is recommended, will not affect the control account it journals/transfers, the amount from the suspense account to the account you used, usually the bank account.
In this instance there is no way other than using a journal to remove the amounts sitting in the control account.
I'm here to provide you assistance on which accounts you can post the PAYE payments and CIS return in QuickBooks Online, @Andy 17.
If you're using a standard payroll, the PAYE payments will be posted to the Payroll Liabilities account. Here's how:
If you're using the QuickBook Online Advanced, the payments will be posted depending on how it was set up in your payroll settings. It would be best to reach out to your previous bookkeeper and ask him on which account the PAYE payments were set up.
For the CIS return, the payments will be posted depending on what account category you've chosen when paying this transaction. You can use the Advanced Search to trace this transaction and check which account you've posted the payment.
If you have any other questions please let me know. I'm always glad to help any way I can.
The steps provided by my peer above won't be any more complicated, klodi007. It's because these are the recommended processes to determine the categories for the PAYE and CIS payments.
In QuickBooks, you can categorise your PAYE payments depending on your payroll version. With Standard Payroll, you can use the Payroll Liabilities account to post your payments.
Moreover, for the Advance Payroll version, you'll have to consult your accountant to verify which account you'll use in recording PAYE payments. This is to make sure you'll be tracking it to the correct account.
On the other hand, your CIS payments will use the account that you choose by the time you pay. You can search for the payment transaction as suggested above to view its category.
Furthermore, you can refer to this article to effectively manage your VAT transactions in your QBO account: Help articles for QuickBooks Online. It contain topics about common VAT codes, submitting a return, and adjusting your liability to name a few.
Please let me know if you have other concerns. I'm just around to help.
So if the VAT returns and payments are not linked to VAT control account then how to remove the balance from it because it is showing the balance in Balance sheet. In my case the ITC is more than the tax liability therefore it is showing negative balance. Kindly suggest what to do
If the Liability Account is showing a negative balance on your Balance Sheet report, this only means that you have an overpaid liability.
You can have it refunded and record it in QuickBooks to zero out the liability. You can follow the step below to enter the refund in QuickBooks Online.
However, if there's no overpayment, you might have a transaction that has not been categorise correctly to the Liability Account which causes the balance. To get this sorted out, I'd suggest to look for those entries and categorise them properly to their respective account.
I'll be sharing with you this article: Adjust your VAT liability. It contains more details on how to adjust your VAT specific to boxes as well as tips on who to contact if you need to report an error regarding VATs in QuickBooks Online.
After trying the steps above, let me know how it goes by leaving a comment below. I’ll be here to keep helping. Have a good one.
Thanks for posting here, @userian,
If this entry should increase your liability, you can post is in the VAT control account. This account records all the VAT on both sales (outputs) and purchases (inputs) so that the balance on the account shows the amount that should be paid to (or claimed from) HMRC.
Also, I would recommend getting in touch with a tax advisor for VAT concerns like this. Adjustments affect balances so the right accounts must be used. Accounting professionals can guide you with this, so your books are accurate.
I'll be adding this resource link to help you with your VAT concerns: Pay and manage VAT in QuickBooks.
If you need anything else, please reach out back to me. I'll be glad to share some insights with you about VAT processing. Have a nice day!
Follow up question
I have just started using Qb and categorised all my transactrions for the previous year.
All the VAT on sales and purchases has correctly put them into a VAT control account.
But there is no VAT return showing for these historic VAT transactions so I can't click on a return to show it was paid. .
The current VAT returns look fine but they only go back a couple of quarters.
All the 'old' VAT is sitting in the VAT control account and messing up my balance sheet.
I alread paid this VAT via BACS from my current account and I can see the payment but I can't seem to get the system to match it to the transactions in the Control account.
I'll lead the way and help you deal with the old VAT Control account balances.
You'll want to create a VAT adjustment to remove the old amounts from the control account. Here's how:
Create a payment by clicking the Record payment button.
Also, I would highly recommend consulting an accountant before doing this. They can properly guide you in handling those old VAT control balances and ensure your books are accurate.
I would also recommend reading this article for a guide in making VAT adjustments: Make VAT adjustments in QuickBooks Online.
As for the downloaded bank transactions, we won't match them to the records in QuickBooks. However, you can exclude those bank transactions instead. Here's how:
After dealing with the VAT control balances, you can start reconciling your account. Check this article for a guide if you need help: Reconcile an account in QuickBooks Online.
I'll be around to help out again if you need assistance dealing with your transactions. Just tag my username and I'll respond to you as soon as possible.