Morning all,
I have a question regarding VT Cashbook and how you enter a VAT repayment correctly. I'm a noobie as I moved from excel to VT Cashbook and while I'm loving it in a geek sense, I'm also not there yet in terms of my understanding.
Could any kind people out there please advise if I have correctly entered a VAT Repayment into VT Cashbook? I entered it as follows:
- Ledger (BANK) Account (Current Account (my business bank) Receipts: HMRC VAT REPAY £100
- Ledger (Creditors) Account (Net VAT Due): HMRC VAT REPAY -£100
When I click on Creditors, Net VAT Due it now shows the repayment as a liability and has reduced the Balance from £100 to zero.
Is this correct or is there a more appropriate way to record this using a different ledger/account?
Many thanks
Mal
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Replies (5)
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I assume you mean by "shows the repayment as a liability" that the transaction is a credit in the Net VAT due account. If so, and the Net VAT due balance is zero, that is as it should be. The credit is not a liability as such but a transaction that clears the pre existing VAT repayment debtor.
So it sounds OK from your decription.
When you run the VAT return you'll create a VAT0000XX transaction.
It will clear your "VAT - Output" and "VAT Input" accounts to zero and transfer the netted off balance to "Net VAT Due".
When the payment or repayment of VAT is posted in Bank, it should match the amount on the VAT0000XX transaction. Select both of them in the Net VAT Due account and click "¢" to allocate them together.
Thanks Daniel. This is "c" function is new to me - I just did as you stated.
I havent used this function before, so I'm going to read up on it now. Thanks!
It's used to 'contra' entries which does two things:
1. allocates them together to make it clear which entries match eachother. E.g. sales invoice and bank receipt so that you know how an amount from a customer has been used.
2. prevents entries from being edited or deleted.
If you're only using Cash Book and not VTT+ then you won't have the sales ledger to worry about.
If the selected entries don't net to zero, you can still use the "§" button to mutually associate entries together.