SAGE double entry for prior year VAT adjustment

SAGE double entry for prior year VAT adjustment

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Hi all

I recently had to enter a manual adjustment when preparing the VAT return in Sage as I discovered input VAT from the previous two years that should have been claimed back and wasn't. The reason for this was that I had assumed that the buildings insurance was T2 but as it was being recharged from the landlord it was actually T1. As I manually adjusted the VAT return I have been left with a balance in the input VAT account and was wondering how to get rid of it. I am thinking of posting it to the insurance account in the P&L account to reduce our insurance costs as these were effectively overstated in previous years. Does anyone concur with this or have any alternative suggestions?

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By johngroganjga
11th Sep 2013 07:48

Yes you post the VAT now recovered to the account where it was originally expensed - namely insurance in your case.

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