Forum Message

Separate VAT Bank Account

Hi
I am registered for flat rate VAT and a few days after i have an invoice paid we transfer all the vat revenue from the our cheque account into a savings account including all the gains however. On the software reflected this by creating a new VAT Account as an Asset. The problem i have is that im unsure whether i am double entering by showing a full transfer from Cheque account into VAT account when the software automatically calculates the the Gain or Loss as an income.


Posted by Gerry Constantatos on Sep 29, 2012 2:26 PM BST

Hi Gerry,

When you pay your VAT to HMRC you will find that there is some money left over in your separate VAT bank account. From an accounting point of view this is fine - you can transfer any amount between your bank accounts. However, you may prefer to transfer only the value of the VAT Liability amount for each sale in order to have the separate VAT bank account balance match the amount you expect to pay HMRC. (To see the VAT Liability amount for the sale view it in the Transactions list)

Regards,


Posted by Mark McLaren (Solar Accounts) on Sep 29, 2012 3:02 PM BST

Hi

Many thanks for your reply. I understand what i need to do from here forward but how do i deal with the fact that in the past i transfered the whole 20% from by business account to the VAT account and withdrew as i saw fit?


Posted by Gerry Constantatos on Oct 1, 2012 10:00 AM BST

Hi Gerry,

The transactions in Solar Accounts should match your bank statement. So if you transferred the full 20% then the transaction your record in Solar Accounts should be for the full 20%.

If you are self-employed and you withdraw money from a business bank account for your personal use then record a General Transaction with the To Account set to 'Owners Drawings and Personal Use'.

Regards,


Posted by Mark McLaren (Solar Accounts) on Oct 1, 2012 10:53 AM BST