Chester258
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Balance on VAT Sales/Purchase control accounts.

Balances on sales/purchase VAT control accounts after VAT reconcile. Why and how to fix?

Hello folks,

I'm a bit confused. I ran a VAT return on 31.08.17 on SAGE and used the tool to run the journal to the VAT liability account. After doing so and running a balance sheet at 31.08.17 I noticed there were Dr balances on both the VAT Sales and VAT purchase accounts. Just over £22.00 on one and £680 or so on the latter. (Standard VAT btw).

I can't for the life of me work out why or how those balances have come about? Surely after the VAT process is run, the balances should be transferred to the liability account and the control accounts become zero?

How can I fix this? Persumably make a correction in the next return so it includes them. Any ideas/tips?

Thanks,

Liam

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21st Sep 2017 15:52

I would probably export the VAT return detailed report and the nominal account for the control accounts for the same period as Excel sheets and then line them up side by side to find where they differ, that should show you what transaction(s) is/are causing it.

I wouldn't blindly make a correction without checking first it wasn't a wayward item that shouldn't be in there.

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By SJRUK
21st Sep 2017 16:07

It can be any number of things.
Firstly was it a zero balance in the last quarter as you might be carrying forward a difference.
Are there transactions after the VAT quarter that are showing on the TB.
Failing that you need to trawl through the codes and make sure there aren't any items posted under a T9 code which are not being captured in the VAT Return - one method is as suggested by Duggimon.
Presumably the VAT isn't being calculated on cash basis?

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to SJRUK
21st Sep 2017 16:37

I have exported every transaction for as long as SAGE will let me for the sales tax control account for now. The only time it was ever zero was at the start (24.11.14) - it has never returned to zero since. I have only taken over for the last of these VAT returns.

There's no additional VAT transactions in the TB and it's not run on a cash basis - cash basis presumably would never be zero due debtors/creditors VAT.

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By SJRUK
to Chester258
21st Sep 2017 17:01

If its not been zero since 2014, then you will have a mammoth job trying to find the difference. What has the accountant finalising accounts done with the difference at the year ends?

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to SJRUK
21st Sep 2017 18:32

24.11.14 - 31.05.15 - £181.00 Transactions £187.65 in Journal

01.06.15 - 31.08.15 - £107.56 Transactions £123.21 in Journal

01.09.15 - 30.11.15 - £163.18 Transactions £159.60 in Journal

01.12.15 - 29.02.16 - £102.40 Transactions £135.04 In Journal.

01.03.16 - 31.05.16 - £241.25 Transactions £155.66 in Journal.

01.06.16 - 31.08.16 - £69.91 Transactions £108.67 in journal.

01.09.16 - 30.11.16 - £365.54 Transactions £214.03 in journal.

01.12.16 - 28.02.17 - £60.79 Transactions £253.11 in journal

01.03.17 - 31.05.17 - £181.48 Transactions £98.27 in journal

01.06.17 - 31.08.17 - £52.37 Transactions £113.06 in journal

Transactions = £1525.48
Journals VAT = £1548.34
Balance = £22.86

Make any sense to anybody?

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to Chester258
21st Sep 2017 18:33

No.

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to Chester258
21st Sep 2017 22:11

You need to look at your outputs as well. If the journals were just run as Sage suggests and without alteration, any journal credits to inputs or journal debits to outputs will be transferred against the wrong account.

This will not solve the overall differenece but may help you to narrow the search.

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21st Sep 2017 16:43

Not something outside the period, is it?

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to lionofludesch
21st Sep 2017 16:45

I didn't actually run the VAT return on 31.08.17 - I ran it on the 11.09.17.

I have then run a balance sheet at 31.08.17 to produce management accounts and found that there are balances in the on the sales and purchase tax control accounts at 31.08.17 despite the VAT journal being run.

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