One of my client company has a year end on 30 June 2016 and the last vat quarter ends in August 2016 (June- august). how do i treat vat in accounts? If i use apportionement for June Only, is this acceptable? company is on Flat rate scheme.
any comments please.
Replies (5)
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I am not sure that I understand what you are asking. Surely it is not whether you include the whole of the VAT liability for the August 2016 quarter as a liability in the balance sheet at 30 June 2016?
For the avoidance of doubt you obviously do not. You just include the liability that has arisen in June (together with the liability for the May 2016 quarter unless it was paid early).
That's not what I would call "apportionment" but you can use what ever word you feel comfortable with. Just think of June as a mini VAT period all on its own and work out the liability on that basis.
I hope that helps.
Agreed
... and to avoid the problem in future, change your client's VAT periods to the calendar quarters. Do it now and you might get one long period of 4 months to December 2016, but if you leave it until November, you will get the normal period of 3 months to November and another return just for the month of December..
I would apply the Flat Rate percentage to June's sales.
But, as the others point out, you're making a rod for your own back here. Either change the firm's year end or the VAT quarter end so that they coincide.
Your client makes sales during the year to 30th June. These sales incur VAT. Some of that VAT has not been paid to HMRC at the 30th of June - so you have a creditor owed the unpaid?