Client company has been trading since May 2012 not vat registered. Company year end is 31st December and I have just been sent the records to produce first accounts (co previously dormant for some years).
Client wants to start using Sage Instant wef 1/1/13 - still not registered for vat.
Registered for vat 1/2/13.
What is the best approach. Is it simple to start as not registered then change at 1st February? What are the mechanics?
Or would it be more sensible to maintain the manual records until 31st January then create the company in Sage from 1st February?
Replies (2)
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Mechanics of not being regd for VAT using Sage
If using Sage: Just enter all the stuff prior to registration as Tax Code T9. That will not generate VAT and these items don't show on the VAT return. If there is any equipment purchased before VAT regn then you can claim back the VAT assuming it's a genuine business expense by using the T1 code.
On the other hand, might be worth continuing manual records to 31/1/13. If there are few transactions, this could be best bet. If there are lots, computerised processing will save you time.
I'll echo everything Moonbeam said but will add that, if you don't want to retrospectively change items to T1 to claim VAT back on the first VAT return you can make on the face adjustments to the VAT return in Sage as well.
I've only used this where I produce ongoing monthly figures for clients and changing an entry from a prior month or quarter would cause confusion by amending previously reported figures