Why are my VAT accounts

[John Ralls]

> On Oct 1, 2015, at 1:10 AM, andy <contact at acorncoopsupport.org.uk> wrote:
> 
> On 30/09/15 16:18, Derek Atkins wrote:
>> Andy (et al),
>> 
>> John Ralls 
>> <jralls at ceridwen.us>
>>  writes:
>> 
>> 
>>>> On Sep 29, 2015, at 2:05 AM, andy <contact at acorncoopsupport.org.uk>
>>>>  wrote:
>>>> 
>>>> Hi John,
>>>> 
>>>> I'll ask my client if they still have a copy of the file pre
>>>> upgrade. I only get their file at the end of year to do their
>>>> reports. However I did set up their accounts with them and used the
>>>> UK VAT Accounts option, did their accounts last year and the VAT
>>>> appeared in the right reports.
>>>> 
>>>> I've just tried to set up a new file (attached) I used the UK VAT
>>>> Option and it automatically sets up VAT as an expense account and
>>>> not a Liability (which it usually is even if actually a negative
>>>> liability)
>>>> 
>>>> I hope this helps. I am very happy to answer UK accounting questions
>>>> to help develop GNUcash but I don't understand programming to help
>>>> with that side.
>>>> 
>>> Andy,
>>> 
>>> Please copy the list on all replies.
>>> 
>>> Thanks, I’ll have a look at the template. I still need to know from
>>> what version of GnuCash your client upgraded to 2.6.7.
>>> 
>> Is this a new file that was created with new templates?  Or is it an old
>> file that somehow, magically "changed" account types across the upgrade?
>> I would be EXTREMELY surprised if it's the latter.  That would be a
>> significant bug if existing accounts in an existing data file magically
>> got changed across a version bump.
>> 
>> IF, however, it's a new data file created from a new template....  Then
>> yes, I could see there being changes to the templates over time that
>> could cause confusion.
>> 
> Thanks for the replies. I've asked my client for the version they upgraded from.
> 
> The first instance was an old file that was working fine last year when I received it. I then 'saved as' to create a new file and sent it back to them. At some point I upgraded and had to do a bit of work on their books and so got the file back. However when I sent it back to them they couldn't open it and needed to upgrade too. Once upgraded the file had the wrong account type (Thanks John for pointing that out).
> 
> I have since created new files using the UK VAT Accounts template and they automatically create VAT accounts as an expense rather than a liability. So I assume this is a problem with the templates in the upgrade.
> 

To make this easy for everyone to see what we’re talking about, that section of hierarchy created follows. All accounts are of type expense, and VAT is a top-level account. The account description provided is in quotes.

VAT "HMRC Input/Output Accounts"
   Input “Purchases, Box 4"
   Output “Box 3”
      EC “On reverse VAT purchases (Box 2)”
      Sales "All, including zero rate UK/EC and World  (Box 1)”

This hasn’t been significantly changed since the template was added in 2007 by a user contribution [1], though there was a bug fix [2] that didn’t affect how GnuCash uses the file.

Unfortunately the structure doesn’t really reflect what the source said was the documentation [3]. The fact that the descriptions indicate specific boxes on some unnamed HMRC form lead me to think that these aren’t intended as the suspense accounts but instead are expense accounts for collecting material costs and goods sales numbers for reporting on a tax form. But I’m American and the way we handle and report sales taxes is completely different. Do those boxes reflect any tax form you’re familiar with? If so, what does it actually collect? 

Regards,
John Ralls

[1] https://bugzilla.gnome.org/show_bug.cgi?id=372948
[2] https://bugzilla.gnome.org/show_bug.cgi?id=738749
[3] http://www.gnucash.org/docs/v2.6/C/gnucash-guide/appendixc_vat1.html