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Where do I post VAT manual adjustments?

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I had some purchases in April's VAT return where the VAT was not claimed (no receipts).  In May I was given the receipts so I then entered an adjustment to May's VAT return for the VAT that could have been claimed in April.  This (in Sage) DR 2202 VAT Liability and CR 2204 Manual Adjustments.  My question is where do I then journal the manual adjusment to?  The cost was already entered in April's ledger so is present in both the P&L and creditors' accounts.  Sage info online does not help either as it just says that the manual adjustment is not included in the sales or purchase tax control account and so gets posted as a journal between the vat liability and manual adjustment accounts.  If needed you can then journal out to relevant nominals but I cannot figure out where this should go?

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By paulwakefield1
04th Jun 2020 08:21

You will have posted the original cost to the P&L gross. Now that you have the VAT receipts, the charge to the P&L should only be the net amount. So the journal is debit manual adjustments and credit the relevant P&L codes.

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By WhichTyler
04th Jun 2020 08:31

Or reverse the original posting and repost as you would normally

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Replying to WhichTyler:
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By FayeBK
04th Jun 2020 08:57

This is what I would do (or just edit the original transaction to now include VAT and Sage will take care of the reverse/repost automatically on the next VAT return).

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Replying to WhichTyler:
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By paulwakefield1
04th Jun 2020 09:05

I wouldn't disagree with that if the OP has not already journalled to the manual adjustments account. But, from the question, I think they have.

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Hallerud at Easter
By DJKL
04th Jun 2020 09:51

Delete duplicate

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Hallerud at Easter
By DJKL
04th Jun 2020 09:50

Not that I use Sage, so only of academic interest, but if one does not put through credit notes for the original invoices and then the correct invoices get posted, how does Sage deal with these transactions for MTD and the next return?

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By susieq
04th Jun 2020 10:14

Unless it's changed, Sage wouldn't pick up codes 2202 or 2204 in the next return so you won't be claiming the vat back. Have you run the vat (obviously without saving it) just to check if it's picking up the adjustment? Can't see how it can, or it would pick up all entries in 2202 (the liability account). I would have thought Dr 2201 (input /purchase tax) and credit the expense in the P&L.

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RLI
By lionofludesch
04th Jun 2020 12:58

Jeez - a VAT Manual Adjustments Account.

How lazy is that ?

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Scalloway Castle
By scalloway
04th Jun 2020 13:18

If you are correcting the error by journal on Sage you need to make sure you use VAT Code T1 so it is picked up for the VAT return.

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Replying to scalloway:
Hallerud at Easter
By DJKL
04th Jun 2020 13:29

But surely, for the accounting records to be MTD compliant, each net sum has to be recorded with its individual associated vat amount, hence my query.

Whilst a single JE may get the total vat correct re the return, if it is correcting numerous purchase invoices it is surely not MTD compliant re the underlying accounting records, or am I missing something here?

Presumably one would need to post numerous individual JE transactions and reverse all the previous postings which suggests to me posting invoices and credit notes may be simpler to ensure compliance?

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Replying to DJKL:
Scalloway Castle
By scalloway
04th Jun 2020 13:46

I managed to retire just as MTD was kicking in so my answer was based on knowledge that is probably out of date.

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