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Scrap metal invoicing on Sage

How to manage invoicing for scrap metal income

Hi, my client has recently sold some scrap metal. He received a scrap metal purchase receipt. They advised him to invoice them so that they pay the VAT.  I am using Sage instant accounting. Do i set them up as a 'customer' and raise an invoice for the whole amount (£239.79) and is that inclusive of VAT or is it £239.79 plus VAT?

Or do i raise an invoice for £239.79 less VAT (£199.83) with then the VAT added to total the full amount of £239.79?

And then i add the amount received (£239.79) as a T1 ? And against miscellaneous income?

He has received a couple prior to this that i've not taken this action on.  Ive put them as a T9. So shall i raise another invoice for the ones not processed before?? They are in prebious quarters - how will this affect previous VAT returns?

Many thanks for your help.

 

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By tom123
17th Jul 2017 14:33

Generally, scrap dealers issue a 'self billed invoice' which is, in effect, your sales invoice to them.

If you are doing it regularly, you could set them up as a 'customer'.

I tend to treat these documents as vatable sundry receipts and post accordingly.

File the self billed invoices with your vat return.

You will need to adjust for your previous errors - assuming they are not massive, you can include this on your next return.

The gross amount needs to match the amount of funds received.

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17th Jul 2017 15:06

As Tom says, you don't have to set up a customer account for them but, if it suits you, feel free to do so.

The invoice is for £199 + VAT. If it were £239 + VAT, the £239 you received wouldn't clear the invoice, would it?

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24th Jul 2017 13:29

Using Sage Instant Accounts with cash VAT accounting you will probably find that it won't let you amend any earlier transaction which has been included (reconciled) in a previously completed VAT return. If it was me, in this case, I would:
if you previously posted them as a bank receipt T9, post a bank payment dated same as original receipt, same amount, T9.
if instead you previously posted as a sales invoices, post a sales credit instead.
That cancels the originals.
I agree with @tom123, scrap dealers generally issue a self-bill which is sufficient & shouldn't require you to raise an invoice to issue to them. You might want to check with them that your client has understood that properly?
Then, assuming that the paperwork you have IS the self-bill:
decide if you are going to set up as a customer. Unless it was going to be every week, I probably wouldn't bother (especially if you use Sage to raise sales invoices, as it would mean raising a sales invoice by copying the details on the self-billing invoice that you have received - duplication of work as you would NOT then issue it).
I would simply do a bank receipt (in current account if it was a bank transfer or a cash account or to DLA if it was cash & client kept it) for the amount T1 (making sure the total is what you actually received).

CASH VAT accounting in Sage is a real pain! Hope that helps?
oh, and I agree as above, retain the self-bills with the VAT return on which they were included. If you're paperless, a pdf scan will suffice.

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