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Post Info TOPIC: Cash accounting
winkle


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Cash accounting
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Hi all....it's me again! I have come back to pick your brains....

I need to make adjustments on our next vat return and am finding this one a little trying to say the least!

We use the cash accounting scheme and have set our sage software to do this.

We have invoiced a customer and received payments where the vat has been calculated at the wrong rate.

One payment on account at 15% and several invoices at 17.5%.
The rate should have been charged at 5%.
All receipts have been reconciled, some were before the current financial year.

How do you show the adjustments for this? If I debit the sales tax control account and credit sales the difference to rectify the invoices....how do I show the adjustment for the vat return?

I made a manual adjustment to a previous return for similar reasons and there is a credit balance in the MA liability account which I don't quite ubderstand, I feel I may have done something wrong here and don't want to make the same mistake again.

Please can someone shed a little light on this for me?


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Stardoe


Guru

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Hi there,

I would make a manual adjustment on the VAT return in Sage when you run it (as you obviously did before) and put in a small explanation as to what it is. The balance on your MA liability account will be correct as this is included in the VAT liability figure.

There is no need to credit sales as I assume the net figure on your invoices was correct, it was just the VAT that was wrong?

HTH
Pauline

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Pauline
RobH


Expert

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I would issue credit notes at the same date as the invoices and match those off and re-issue correct sales invoices.

Rob

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Rob
www.accounts-solutions.com
winkle


Veteran Member

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Posts: 36
Date:
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Hi Pauline & Rob :o)

Thank you for your reply

I had already previously made an adjustment on the sales and vat on the first deposit received as I had issued the invoice after the deposit was received with the wrong vat charge

I now have to refund the customer the difference in vat plus the adjustment made previously....I am wondering how I will record this payment?

To make it all tidy I would like to credit all and re issue and match it all off....but can I do this when all receipts have been matched off to the invoices

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