I have just run the VAT report for the quarter ending Aug 14. When I have run the TB for the same period the net off figure sales and credit tax control accounts do not match the vat payable figure. Can anyone help me find out why it is different. The accountant says to run a nominal activity report off to find the difference but I do not know how to do this and what I am looking for.
There are a number of factors which might explain this - so to help narrow it down, it would be useful to know:
Whether or not the VAT is calculated on a cash basis
And what software you are using
For example, if your VAT is on a cash basis and you are using Sage, then I can tell you that the net balances on the output and input tax control accounts at the date of the VAT return will not match the amount payable according to the return (though it's possible to reconcile them).
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Hi Marina, I am still only studying so I may be wrong, but I think the accountant means, look at your list of nominals highlight sales and and the tax control account and then print of the report which may show what is wrong. :)
Okay, that rules out the most obvious explanation (the example I gave).
Another couple of questions:
Can you confirm that the VAT transfer wizard has been run after producing previous VAT returns (so that the outputs tax has been debited from 2200 and credited to 2202, and the inputs tax has been credited from 2201 and debited to 2202 - assuming you are using the default codes).
And can you also therefore confirm that when any payments have been made to HMRC (or repayments received from them) in respect of the VAT returns, those transactions have been posted to 2202.
(The result of this is that after processing a VAT return, the balance on 2202 will be the amount owing one way or the other, and when a payment is made, or a refund received, 2202 will be zeroed by that transaction.)
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
Run the detailed report for the VAT return and compare that to the nominal.
If doing on SAGE then easiest way is to download both to CSV, sort both by size, merge both files then compare line by line. Quickest way is to add additional column then do VAT return - nominal ledger line by line and that should quickly highlight the difference.
Thanks everyone for your replies. Vince - this is brand new software as the Company is a start up. So no vat wizards have been used before. In the old company the software was an old version so Vat was manually submitted to HMRC after running the generate vat return. In the old software the TB tax control accounts always matched the vat return. Lucky me!!
What I would like to know is why it does not match - I must have posted something wrongly?
Okay, your answer rules out a number of possibilities, leaving us with a relatively simple search.
Mark's given you an answer which matches what your accountant has suggested - but based on your original question, you don't know how to do that. So it's something I (or someone else if they get there before me) will come back to in a later post.
First of all, though, another possibility is that there are transactions on Sage dated before the VAT period, which haven't been included on the return. (Even though you say it's a new company/start up, there may be transactions relating to start up costs that are dated earlier.)
Whether this is the case, depends on the way you've processed the VAT return - and, of course, whether there are any such transactions.
To rule this out (or discover that it's the answer), when processing the VAT Return look out for something that refers to "unreconciled transactions from before the specified period" (or words to that effect), and make sure those transactions are included.
On my version, this appears as a pop up warning; when I tell it to calculate the VAT Return it says something like "13 unreconciled transactions found from before the specified period. Do you want to include them?" (or something like that) - but I've a funny feeling it's no longer a pop up warning in newer versions, and is instead an option on the return screen. Look for it, tick/select it.
(As a general rule of thumb, for future reference you *will* want to include older, unreconciled transactions , since these will typically be transactions entered late - e.g. an invoices that were received late, after you've processed that VAT return for any given quarter, and so on).
If VAT return figures now differ from what you had before, and happen to match the trial balance figures - hey presto, that was your answer.
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Vince M Hudd - Soft Rock Software
(I only came here looking for fellow apiarists...)
