How to Enter a Supplier Payment for 100% VAT Amount Only (VAT Accrual Scheme Only).

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    How to Enter a Supplier Payment for 100% VAT Amount Only (VAT Accrual Scheme Only)

    How to Enter a Supplier Payment for 100% VAT Amount Only (VAT Accrual Scheme Only).

    To record a Bank Payment for a 100% VAT only amount, please follow the below procedure:

    Let’s say the VAT amount is £200, the Net Amount is £0 and the Gross Amount will be £200 (you will be able to use your own VAT values to calculate the Net Amount you should use for your transaction).

    1 – Enter a Purchase Invoice (Standard Tax Rate)

    for Qty: 1, Unit Price £1000, Nominal Code (mispostings or other), Tax Rate: Standard VAT 20% (VAT will then calculate as £200)

    2 – Enter a Purchase Credit (0% Exempt Transactions)

    for Qty: 1, Unit Price £1000, Nominal Code (mispostings or other to match the nominal code in step 1 above), Tax Rate: Exempt Transactions (0%) (VAT will then calculate as nil and the £1000 will net off against the £1000 posted in step 1 above).

    The result of this will be £200 in the Purchase Tax Control account that will appear in the VAT return, the £1000 in the Purchase Invoice and the Purchase Credit will net off in the purchases and box 7 of the VAT return)

    3 – Bank Allocate Credit and Payment on Account to Invoice

    To ensure the Supplier Account balance is correct and the Purchase invoice is settled correctly, please to to Bank>Allocate Credit and Payment on Account to Invoice, find the Supplier Account and Allocate £1000 to the Purchase Invoice (From Step 1 above) from the Purchase Credit in Step 2 above.

    4 – Enter a Bank Supplier Payment

    Please select the appropriate Bank Account, Select the Supplier account and enter your £200 payment against the outstanding Purchase Invoice.

    You should consult with your accountant and test the procedure in your Sandbox prior to implementing on your live system.  Check your Supplier Balance, Bank Account Balance, Trial Balance and VAT returns before and after you implement this procedure.

     

    in BankTransactionsVAT Return Tags: PaymentSupplier PaymentsVAT