Marginal VAT & postings on Sage 50

Marginal VAT & journal adjustments on sage 50 & T9

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Apologies if I'm being really dense.  We are about to start selling under the marginal VAT scheme for second hand electrical items.  According to sage 50 help pages that we read it says to record the sales and purchases under their own nominal code and use T9 - Firstly I'm not sure this is the right tax code to use so any advice would be appreciated?

Then to calculate the margin and from this figure calculate the output VAT.    For example the sage sales under T9 are £155K gross and the purchases are £150K gross.  The stock records margin on the items sold is £30K and the output VAT £5K - the gross sales are £155K and the gross cost £120K. 

So I DR £5k to the sales code and CR 2200 sales tax control, what do I need to do next to get boxes 6&7 to be correct? 

We cannot use a bolt on software due to the volume of the items and we already have a stock system that logs all of this, so i'm stuck with having to adjust manually.

I have searched this a lot and the only information I can find is from Sage, the steps below are what they advise  - I'm concerned these adjustments will create another posting that I will have to clear.

To correct the box 6 and 7 figures

Box 6 - To calculate the value to correct box 6.

Calculate the net sales figure for the month by subtracting the VAT on Profit figure from the Sales figure.

Add together the net sales figures for all of the relevant months.

Box 7 - To calculate the value to correct box 7.

Add together the costs figures for each of the relevant Output Tax reports.

VAT > VAT Return > enter the dates for the VAT period > Calculate VAT Return

Make adjustments > double-click the figure in box 6.

Double-click the figure in box 6 > enter Margin scheme in the Reason > enter the value you calculated in step 1 > Save.

Double-click the figure in box 7 > enter Margin scheme in the Reason > enter the value you calculated in step 2 > Save > Close.

Reconcile your VAT Return as normal.

Thanks for any advice, I may stop banging my head off the desk eventually!

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By JKnight
23rd Feb 2017 19:03

"So I DR £5k to the sales code and CR 2200 sales tax control" - the credit journal to 2200 needs to use tax code T1 otherwise the VAT amount will not be picked up on the Sage VAT return.

T9 is Sage's default Non-VATable tax code, and postings with this code should not appear on the VAT return.

Sage's suggested manual adjustments to boxes 6 and 7 should not create any nominal entries.

You can use the practice company to have a trial run and see how it works on a VAT return.

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