VAT on Accrued Income

VAT on Accrued Income

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I have come across a situation that has not happened to me before and I just want to make sure I am completing the correct treatment for this.

Year 6th April - 5th April a ltd company.

Work has been done in March & up to and including 5th April nothing beyond therefore making this accrued income.

Invoiced on 13th April and paid 13th April so i need to journal DR Accrued Income, CR Sales.

However the business is VAT registered.

Do I account for VAT in my journal or enter the journal Gross. 

THank you for your help in advance

Replies (5)

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By Asher123
06th Sep 2012 12:07

No,it is very similar to the accrual you make for accountancy fee for the current year you do,you put the accrual net of vat.

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By User deleted
06th Sep 2012 13:09

Depends

What type of services/goods does the business supply? ie, when was the VAT taxpoint?

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By Astronaut
07th Sep 2012 13:39

The tax point is the earlier of the date of the invoice or the payment, so in this case there is no VAT entry related to your accrual. VAT will be accounted for in April.

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Euan's picture
By Euan MacLennan
07th Sep 2012 13:46

Accrued bonuses

The same applies to accruals of bonuses, commission, etc., to be paid after the year-end with regard to the employer's NIC.  NIC is only payable when the payment is made, so the liability has not yet arisen at the year-end.

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By neileg
07th Sep 2012 13:53

Actually...

...the tax point is the earliest of the date of payment, the invoice date or the date of supply. So strictly speaking VAT is due at the year end.

If the invoice is issued within 30 days of the supply, then the tax point becomes the invoice date but that hasn't happened at the year end.

However, no accountant I know would actually accrue the VAT liability.

How many angels can dance on the head of your pin?

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