Hi, Our company was set up December 2007 ,we only started actual trading of our business in April this year, although we incurred alot of business expenses in setting our business up for which we have reclaimed the VAT back. can you tell me how I record this transaction. Thank you very much. I would also like to take the oppurtunity to say how wonderful your software is. I have looked in to all the different ways of keeping the book work simply, even purchased a Sage CD, which was really confusing, Solar was exactly what I was looking for.
Hi Louise,
Thanks for using Solar Accounts - we're glad you like our product!
When you record your initial expenses in Solar Accounts it will reduce the balance of the VAT Liability account, resulting in a negative balance (you can see a running balance in the Account Activity screen).
To record the reclaimed VAT paid to you by HMRC, create a new Money Received transaction and enter these details:
- The Received From field should be 'HM Revenue and Customs',
- The Deposit Into Account should be 'Cheque Account'
- The From Account should be 'VAT Liability'
- The VAT Treatment should be 'Out of Scope'.
I hope this makes sense - please let me know if you need more information.
Cheers,
