Receiving advance payment and VAT

[NigelH]

We received most of our income from our clients by monthly direct debit and once the work has been completed we issue an invoice.

Our VAT is calculated on the cash basis so the correct treatment is to pay VAT when the monthly amounts are received and the company accounts need to be based on the accruals basis so we look at the invoiced amounts

We are using QB2012 Pro and trying to work out the best way to enter the details.

The issue we are having are as follows

1) If we show the payments as received payments it does not incude the amounts in the VAT calculations if no invoice has been raised.

2) If we use sales recepits it does include the amounts on our vat return but also in the accounts figures.

The amounts of the monthly clients payments stay the same but the invoiced amounts changes. This does then mean the clients can have overpaid or underpaid at any point.

[sedakensearch]

Originally Posted by NigelH

We received most of our income from our clients by monthly direct debit and once the work has been completed we issue an invoice.

Our VAT is calculated on the cash basis so the correct treatment is to pay VAT when the monthly amounts are received and the company accounts need to be based on the accruals basis so we look at the invoiced amounts

.

Hi
I am also facing same problem as mentioned above.

Were you able to sort out this problem or not?

I am using sage and wanted to change to QBW but it doesn't seems straightforward in QBW.

Any help will be appreciated

sedak

[clare@cryogenic]

Not sure if this will help but I use an estimate, then you can give an advance warning of charges but then convert to invoice when you receive the payment. which will then add it into your accounts.

[welsh rarebit]

I have a client with the same problem as Nige. I rang the Intuit help desk and asked for some help with this but whatever I do the VAT is not being accounted for correctly according to the HMRC web site.

This is a serious error and as yet no-one has got back to me on it.

I will try ringing them again early next week.

Kind regards

Chris

[sedakensearch]

Originally Posted by welsh rarebit

I have a client with the same problem as Nige. I rang the Intuit help desk and asked for some help with this but whatever I do the VAT is not being accounted for correctly according to the HMRC web site.

This is a serious error and as yet no-one has got back to me on it.

I will try ringing them again early next week.

Kind regards

Chris

Hi,

I called them regarding this. They could not give me any solution after talking to them for more than 1 hr, I told them that QB is not Complying with HMRC.
I am sure there are lots of people using qb without realising this problem.
And this is the serious problem. There is hefty penalties for not submitting right vat return.

I also noticed that the calls we made is dealt somewhere outside uk maybe in usa or canada . Most of the time we talk to system expert not to qualified account professional who knows about uk accounting and book keeping rules. Not good at all for the company like Quickbook.

Good luck with your enquiry and let us know if you are success full.