Oh dear, it turns out we don't get VAT back...
Keith A. Milner
maillist at superlative.org
Wed Jun 15 04:16:14 EDT 2011
On Tuesday 14 Jun 2011 14:12:46 edpsystems wrote:
> ...so after spending 6 months plugging all our purchases into GnuCash as
> Bills, and processing payments correctly so that the asset accounts
> reconcile at the end of each month, our accountants tell me that as we
> don't charge VAT to our customers, we can't claim it back from the tax
> office on purchasing.
>
> So I've entered the net costs from about 400 invoices as Bills, with the
> VAT calculated according to the Tax Table for each Vendor and the VAT has
> been syphoned off into a separate VAT account. All my expenses are
> incorrect then because they show the net cost (in the hope that the VAT is
> returned to us, when it isn't).
>
> [kicks himself]
>
> My question is, is there a simple way of correcting all the items on all
> the Bills so they include the VAT?
>
Disclaimer: I am not an accountant
I'm not entirely sure I see the problem. If you have created the bills and the
VAT has been computer on them using the tax table, the bill should show (and
be posted with) the total amount including VAT.
Whether you are VAT registered/able to claim VAT or not, at the point of
creating (and paying) the bill, should be irrelevant. At this point VAT should
just (effectively) be another expense category in the same way as (for
instance) postage.
The only time the VAT becomes relevant and different from any other expense in
accounting terms is when you come to do a VAT reclaim, in which case you offset
VAT paid on purchases (input VAT) with VAT received on sales (output VAT).
Note that Gnucash doesn't do anything clever with VAT. Any VAT payment/reclaim
calculations have to be done manually and the resulting transation manually
entered. You normally do this when you do your VAT return.
If you aren't reclaiming VAT then you can and should treat VAT as just another
expense category.
The only thing you may wish to do is move the VAT account into a different
location in your account tree (such as under Expenses) to make reporting
easier.
Cheers,
--
Keith A. Milner
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