Flat rate VAT adjustment and Year end accounts

Flat rate VAT adjustment and Year end accounts

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Hello,

I am preparing End of Year account, the client is running Flat VAT rate scheme. The year end is end of February, last VAT return was filled at the end of December. Do I need to make an adjusting journal to include the Flat rate adjustment for the sales in January and February?

Thank you for the advice.

Beata

Replies (4)

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By iavago1
22nd Mar 2014 12:11

Yes.
Yes because the accounts will need to show the turnover net of vat in the profit and loss account and the liability for the vat for the two months in the balance sheet.

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By johngroganjga
22nd Mar 2014 12:12

Yes. If you didn't, wouldn't you be overstating sales and understating creditors?

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By coolmanwithbeard
22nd Mar 2014 12:33

Or possibly the opposite John..

If you use QuickBooks flat rate scheme the invoices go through as normal and the flat rate adjustment is only added when the Q/E VAT routine is run so in this case you would be understating turnover and over stating creditors.

 

Either way if the VAT q/e is not the same as the year end adjustment would be needed

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Replying to Lisa R:
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By paulhammett
22nd Mar 2014 18:43

Going forward . . . .
. . . It might make life easier to change the vat quarter end dates to coincide with your year end. This can easily be set up by notifying HMRC online.

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