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MTD software that will allow a negative figure in

We are partially exempt for VAT

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We are partially exempt for VAT and the annual adjustment takes our box 4 figure negative (original figure £50k and adjustment £55k).  We use Avalara to submit and this won't allow a negative figure in box 4.  HMRC says it is a software issue, we can't submit through gov.uk and need to get software provider to fix.

Has anyone else had this issue or can recommend a MTD software that will allow a negative figure here?

Thanks

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By AWeb72
04th Sep 2020 14:17

You submit showing a positive figure, the HMRC system picks up it's a refund.

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Replying to AWeb72:
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By vic77en
04th Sep 2020 14:31

Thanks for the response. But if I enter it as a positive figure, it then won't allow me to enter the correct net payable figure as it has a check this is box 3 - box 4.

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Replying to AWeb72:
RLI
By lionofludesch
04th Sep 2020 14:46

AWeb72 wrote:

You submit showing a positive figure, the HMRC system picks up it's a refund.

He says Box 4, not Box 5.

So far as I know, you'd need to stick the annual adjustment in Box 1 under either MTD or the old flat-cap software.

It's a fairly unusual scenario.

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Replying to lionofludesch:
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By vic77en
04th Sep 2020 14:53

Thanks, we're trying to see if absolute tax will accept the figures, but if not then yes, think it will have to be a box 1 adjustment to submit the correct net payable figure.
I agree it's an unusual scenario - covid combined with closure of a taxable part of the organisation at the start of the year had created a perfect storm!

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Replying to vic77en:
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By lionofludesch
04th Sep 2020 15:11

vic77en wrote:

Thanks, we're trying to see if absolute tax will accept the figures, but if not then yes, think it will have to be a box 1 adjustment to submit the correct net payable figure.
I agree it's an unusual scenario - covid combined with closure of a taxable part of the organisation at the start of the year had created a perfect storm!

It's not a work-around - I don't think you were ever supposed to show a partial exemption annual adjustment as a deduction from input tax. If the result is an overclaim, imho, it should go in Box 1 every time.

Makes no odds, obviously - until you have an adjustment that exceeds your input tax. As you have discovered.

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Replying to lionofludesch:
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By vic77en
04th Sep 2020 16:29

Oh interesting

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By AWeb72
04th Sep 2020 20:12

That'll teach me to think I can speed read.

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By johnhemming
04th Sep 2020 18:00

MTD software should allow a negative figure for boxes 1, 2, 3 and 4, but not 5.

Mine does.

http://www.vat.direct

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By paulwakefield1
05th Sep 2020 08:26

I have recently had a VAT return with a negative Box 4 which the software quite happily submitted (Can't recall which it was now - VT or Xero probably) so it ought to be possible. I suggest you try John's software as in the post above.

I agree with Lion that overall it makes no difference but I really think that the adjustment should be going through Box 4 not Box 1 - it is an adjustment to input tax recovery and not an output.

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Replying to paulwakefield1:
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By lionofludesch
05th Sep 2020 08:56

paulwakefield1 wrote:

I agree with Lion that overall it makes no difference but I really think that the adjustment should be going through Box 4 not Box 1 - it is an adjustment to input tax recovery and not an output.

It's crazy to apply that sort of logic to any HMRC return.

Negative entries just attract queries, imho, and I can do without the hassle.

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Replying to lionofludesch:
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By paulwakefield1
05th Sep 2020 09:23

I must have been lucky. Never had a query on a negative entry!

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