VAT Question

Lifeisbutadream

I work out my VAT myself (i.e. I dont use an accountant). I have set up spreadsheets which pick up the VAT to claim back against the VAT payable and then pay the correct amount quarterly.

I always try and update all the receipts for the VAT to claim, but occasionally one or two slip through the net (because hubby stores them in his wallet!) and I dont get to input them until after the return has gone.

We have only been VAT registered for 8 months, so I have only send 3 returns so far.

This means that all three returns I have paid are actually a different amount than I owed. The amounts are minimal (less than £100 each time) and are in teh favour of HMRC in two of the cases.

I have not done anything about this, because I dont want to confuse myself! my question is should I do something, or just leave it until the end of the year? or leave it altogether? (obviously if I had an investigation it would be picked up, but as it is in their favour at the moment, would it really matter?

Bean_Counter

Lifeisbutadream wrote: »

This means that all three returns I have paid are actually a different amount than I owed. The amounts are minimal (less than £100 each time) and are in teh favour of HMRC in two of the cases.

I don't really understand the question. Are you saying that you have not put something on the VAT return because you didn't have an invoice for the expense?

What is the situation with the third claim which is not in HMRC favour?

JasonLVC

Hello lifeisbutadream,

Glad to hear the business is still busy.

If you make an error (ie, reclaim of VAT or payment due to HMRC in a different month/period to when it should have been), then provided the error is less than £2,000.00 of VAT you can simply make an adjustment on your next VAT return.

Example. VAT return for October gone off now, next return due January. You find a receipt for goods (£1,000 of VAT) bought dated August. Should have gone on the October return, but you can process it in January or indeed the period after that.

If the value of the error is over £2,000 you need to complete a VAT652 form (download of HMRC website) and send to your local VAT office. The error doesn't go on your next VAT return, the error is processed seperately and any money due back to you or to HMRC is added/deducted from your account. Do too many of these claims and you'll likely get a visit.

Lifeisbutadream

Bean_Counter wrote: »

I don't really understand the question. Are you saying that you have not put something on the VAT return because you didn't have an invoice for the expense?

What is the situation with the third claim which is not in HMRC favour?

I update my spreadsheets with all invoices/receipts as I get them from OH.

I file my return when it is due, but sometimes get further invoices/receipts, which I then input into my spreadsheet. This changes the amount owed for VAT, but as I already paid them, have not done anything.

The one in HMRC's favour was because I input a receipt twice in error.

Sorry just re-read your question - thats right, I wouldnt put something on the VAT return unless I had a receipt or invoice.

Lifeisbutadream

JasonLVC wrote: »

Hello lifeisbutadream,

Glad to hear the business is still busy.

If you make an error (ie, reclaim of VAT or payment due to HMRC in a different month/period to when it should have been), then provided the error is less than £2,000.00 of VAT you can simply make an adjustment on your next VAT return.

Example. VAT return for October gone off now, next return due January. You find a receipt for goods (£1,000 of VAT) bought dated August. Should have gone on the October return, but you can process it in January or indeed the period after that.

If the value of the error is over £2,000 you need to complete a VAT652 form (download of HMRC website) and send to your local VAT office. The error doesn't go on your next VAT return, the error is processed seperately and any money due back to you or to HMRC is added/deducted from your account. Do too many of these claims and you'll likely get a visit.

So can I just adjust them all on next return? I probably need to find a better way of keeping records, because I feel that I will confuse myself!

OH is not good at always giving me receipts - he gave me one this morning from August!

I have a spreadsheet set up on Excel for VAT returns. One part of the form I have set up for 'hardcoded' VAT amounts - i.e. the amount I paid, then another part is the actual total, which updates itself as I update other spreadsheets with invoiced amounts we have invoicd and invoices paid/receipts etc. This amount often changes when I add further amounts or when I do double checks (only small amounts though - it would never account to over £2K!)

PS. Thanks re the business! we are fully booked up until end January, which is more than anyone could ask for!

JasonLVC

Yep, just adjust on your next return. Technically he could cough up a receipt from January 2007 and you could still stick it through yourself without telling HMRC - as long as it is a valid VAT receipt of course.

The important thing is to keep track of those 'stray/delayed' receipts as thankfully you do the books, but if someone else took over, they may accidently double claim or not claim at all (ie, - see an old receipt and either assume already accounted for or stick it through now not realisng you'd already included it, etc)

Not going to happen I know, just my way of saying keep the OH well away from the books - sounds like he'd knacker them up!.

Lifeisbutadream

JasonLVC wrote: »

Yep, just adjust on your next return. Technically he could cough up a receipt from January 2007 and you could still stick it through yourself without telling HMRC - as long as it is a valid VAT receipt of course.

The important thing is to keep track of those 'stray/delayed' receipts as thankfully you do the books, but if someone else took over, they may accidently double claim or not claim at all (ie, - see an old receipt and either assume already accounted for or stick it through now not realisng you'd already included it, etc)

Not going to happen I know, just my way of saying keep the OH well away from the books - sounds like he'd knacker them up!.

Dont worry - OH isnt even allowed in the office - he has an in-tray just near the door with a chair next to it:D

Mike_by_the_Sea

Hi lifeisbutadream

It sounds like all you really need is another column in your spreadsheet to show the VAT return that the item was included in. That way you can just add OH receipts as he finds them into your current return and you have a record of the actual date and the VAT return it was included in - job done.

All the best in the business

Mike

Bean_Counter

Lifeisbutadream wrote: »

I update my spreadsheets with all invoices/receipts as I get them from OH.

I file my return when it is due, but sometimes get further invoices/receipts, which I then input into my spreadsheet. This changes the amount owed for VAT, but as I already paid them, have not done anything.

The one in HMRC's favour was because I input a receipt twice in error.

Sorry just re-read your question - thats right, I wouldnt put something on the VAT return unless I had a receipt or invoice.

Sounds like you are doing fine.

JasonLVC's advice is as usual spot on regarding wee adjustments to the return.