[GNC] How can I find cost of expenses, including tax?

[Dr. David Kirkby]

On Tue, 20 Dec 2022 at 09:43, Maf. King <maf at chilwell.net> wrote:

> Morning Dave.
>
> I think the answer to this depends on the question "are you planning to
> register for VAT?", and also falls squarely in the category of "ask your
> accountant for his opinion on how to do this"
>

Unfortunately turnover is not going to force me to need to register😢😢😢,
but it might make sense to. Currently 90% of what I buy has VAT on it, but
only 10% of what I produce goes to the UK.

However, the other reason for me wanting to separate out the VAT now is
that it makes creating bills much easier.  The main suppliers I purchase
from (RS, Farnell, Mouser) only list ex-VAT prices. So it’s much easier to
use the ex-VAT prices and have GnuCash calculate the VAT.

As a test, I set up a new set of accounts from GnuCash, selecting the UK
VAT model. I didn’t find them particularly intuitive, not helped by the
fact that the instead of the usual accounts

Assets, Expenses, Liabilities. Equity & Income

another top-level of accounts is produced for VAT, so one has 6 categories,
not the usual 5. I will have another look, but they seemed confusing to me,
with reference to box 4 or similar.


This video on YouTube

https://youtu.be/rd76CTl1rXQ

looks potentially interesting. This post

https://lists.gnucash.org/pipermail/gnucash-user/2003-July/007526.html

probably explains what these boxes are.

>
> If you are planning to register, then you might as well start your books
> with
> that goal in mind and have the appropriate VAT collection accounts in your
> tree from day 1.


Unfortunately I have just input a month’s transactions into GnuCash. All
them will need to be entered again 😢😢😢😢

Fortunately I am a lot quicker now at entering the transactions than I used
to be, so it will not be such a pain.

Customer and vendor lists will be easy to just copy/paste.

I think I will start again with the information needed for handling VAT.

If you are not registering, then either:
>
> you don't record the VAT portion independently of the stock, and it just
> costs
> 20% "more"  ( i think this is what your accountant will say)


It would be a real pain for me creating bills though.


> Conceptually I think you are mixing two models: either the cost of VAT is
> the
> cost of VAT and the cost of stock is net, or the cost of stock is gross
> and
> you have no cost of VAT.... you can't really mix the 2 models and expect
> accurate or easy answers....


Yes, I think you are right. Fortunately I realised the problem before
entering in too much data.

>
> You *could* mirror your expenses tree into a VAT branch too...
> Expenses:
>     Stock
>     Office
>     VAT
>         Stock
>         Office
> etc.
> but that seems like pain for little gain!



>
> HTH,
> Maf.


Dave

>
> --
Dr. David Kirkby,
Kirkby Microwave Ltd,
drkirkby at kirkbymicrowave.co.uk
https://www.kirkbymicrowave.co.uk/
Telephone 01621-680100./ +44 1621 680100

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