How do I do sage Vat return for flat rate /

[MystK]

Hi

just updating my 1st client (husband) into sage
we've done our 1st vat return on flat rate (12% for 1st year) and also cash based (on only 2 invoices)
how on earth do I tell my sage system ?

sorry - it didn't come up in training !!

thanks

[jholden]

Sorry not really help, but I am not sure if Sage can cope with flat rate VAT.

In fact there are only a few software providers that can cope with the Flat Rate Scheme.

Our clients use www.winweb.com the software deals with flat rate scheme.

Jason

[sheelagh]

Sage won't calculate the VAT figures for you automatically. You will need to calculate 12% of the total (gross) value of your sales.
Box 1,3 and 5 = 12% of total gross sales.
Box 6 = gross value of sales.
There is more that one way to record your VAT figures for FRS in Sage, depending on how you have recorded your sales. You should have recorded all your expenses without VAT, using tax code T9 so you should have a nil balance in the Purchase Tax Control Account.
1) if you have recorded only the gross value of your sales, you will have a nil balance in the Sales Tax Control Account. If this is the case, post a journal for the amount of VAT due - DR Sales, CR VAT Liability.
2) if you have recorded the net and VAT (17.5%) value of your sales (this will happen automatically of you use the Sage invoicing module to raise your invoices) you will have a balance on the Sales tax control account. If you have done this, post a journal for the difference between 17.5% VAT and 12% VAT - DR Sales Tax Control, CR Sales.
Then post another journal for the amount of VAT payable - DR Sales Tax control, CR VAT liability.

Sheelagh, bookkeeper

[DuaneJackson]

Might as well chip my tuppence-worth in too and say that KashFlow also handles Flat Rate : )

[KM-Tiger]

Sage won't calculate the VAT figures for you automatically. You will need to calculate 12% of the total (gross) value of your sales.
Box 1,3 and 5 = 12% of total gross sales.
Box 6 = gross value of sales.
There is more that one way to record your VAT figures for FRS in Sage, depending on how you have recorded your sales. You should have recorded all your expenses without VAT, using tax code T9 so you should have a nil balance in the Purchase Tax Control Account.
1) if you have recorded only the gross value of your sales, you will have a nil balance in the Sales Tax Control Account. If this is the case, post a journal for the amount of VAT due - DR Sales, CR VAT Liability.
2) if you have recorded the net and VAT (17.5%) value of your sales (this will happen automatically of you use the Sage invoicing module to raise your invoices) you will have a balance on the Sales tax control account. If you have done this, post a journal for the difference between 17.5% VAT and 12% VAT - DR Sales Tax Control, CR Sales.
Then post another journal for the amount of VAT payable - DR Sales Tax control, CR VAT liability.

Just a thought, would a manual cashbook actually be easier?

[Alpha]

Sage won't calculate the VAT figures for you automatically. You will need to calculate 12% of the total (gross) value of your sales.
Box 1,3 and 5 = 12% of total gross sales.
Box 6 = gross value of sales.
There is more that one way to record your VAT figures for FRS in Sage, depending on how you have recorded your sales. You should have recorded all your expenses without VAT, using tax code T9 so you should have a nil balance in the Purchase Tax Control Account.

I would not advise using T9 for this. T9 should be used for items which are outside the scope of vat eg wages and other journals, and bank interest received/paid. If you use T9 and you have any reverse charge items you will run into problems.

1) if you have recorded only the gross value of your sales, you will have a nil balance in the Sales Tax Control Account. If this is the case, post a journal for the amount of VAT due - DR Sales, CR VAT Liability.

If you have only recorded the gross value and used sage invoicing again you will have done it incorrectly.;) You must show the vat rates and split on all invoices.
2) if you have recorded the net and VAT (17.5%) value of your sales (this will happen automatically of you use the Sage invoicing module to raise your invoices)
It will not neccessarily happen automatically if the default has been set to T9:)

[Greensand Ridge]

I've been on the flat rate scheme throughout the last year. My accountant suggested that I treat all VAT in my Sage as though I was on normal invoice accounting for VAT and he will do a one-journal adjustment at the end of the year.

The net effect of this is that I've ended up with a few hundred pounds of extra profit at the end of the year.

[jholden]

Another thought, if you are on the flat rate scheme remember not to claim input vat back (except in certain situations).

Rather than go to a manual set of records or struggle further with the restrictions of Sage, why not consider an alternative software that does what you want of it?

Jason

[MystK]

Hi

thanks for all the replies,
I have been onto sage weblinks and have some reports printed to change settings.

I actually starting invoicing (and collating bank info etc) in Excel as easy weekly (service) invoices, and we worked out the 1st VAT return as only on 2 invoices and have paid it, and yes I have some 'spare' vat money

I couldn't start on Sage until I'd passed my ICB2 exam (100% distinction) and so I can now use it for business - funnily enough different vat rates didn't come up in my course ! So I'm using it because it's free - as in already paid for.

so yes I agree looks like I need some journal entries to sort out before I can process that transaction for my VAT.

thanks a lot for all the help,
when I'm sorted I'll be ready to be let loose on the general trading public :-)

Cheers, Kirsty

[sheelagh]

I would not advise using T9 for this. T9 should be used for items which are outside the scope of vat eg wages and other journals, and bank interest received/paid. If you use T9 and you have any reverse charge items you will run into problems.

Good point - I suggested T9 for all expenses because T9 transactions won't appear on the Sage VAT return calculation. Since input VAT is not required on an FRS return I thought this might save confusion. How would you deal with EU transactions when using FRS?


1) if you have recorded only the gross value of your sales, you will have a nil balance in the Sales Tax Control Account. If this is the case, post a journal for the amount of VAT due - DR Sales, CR VAT Liability.


I was thinking about business owners who raise their sales invoices on a system separate to Sage. The sales invoices would be issued to the customer with 17.5% VAT, but the gross value only can be recorded in Sage. in the customer batch invoice screen. If you used T0 code here, the Sage VAT calculation would give you the gross value of sales for box 6.


2) if you have recorded the net and VAT (17.5%) value of your sales (this will happen automatically of you use the Sage invoicing module to raise your invoices)


Again, I assumed Mystk would have raised the sales invoices in the invoicing module with the correct VAT. When posting these invoices, output VAT would be posted to the sales tax control account at the same rate/value as shown on the invoice.

My apologies for any confusion.