Following on from Sage – How to manage your VAT part 1, here, as promised, is a guide to producing and submitting a VAT return in Sage 50 and Sage Instant Accounts.
I would always you recommend you take a backup of your Sage data before running the VAT return, as once you have hit that Reconcile button there is no going back.
How to calculate your VAT return on Sage
To calculate your return for submission, click into the Company area and then on Manage VAT in the Tasks list at the top left. When you click on the VAT Return icon at the top, you are then faced with an image which looks very much like a VAT return. This asks you to enter the first and last date of the period in the top right. You then click on Calculate at the bottom left. Once calculated, a summary screen will be displayed that states how many transactions have been found for this VAT return, and you may be asked if you want to include unreconciled transactions from the previous period.
If you do your VAT and reconcile it every month then you should say YES to this question. These will normally be corrections or late entries made since you processed the last VAT return. If they are from the previous quarter, you can include them as long as they are not above a certain value. Take a look at the HMRC website for guidance if you are unsure about including these transactions in your return.
Checking and reconciling your VAT return
I always recommend you print the VAT return and the detailed list for your records, to keep in case you ever have a VAT inspection, and to visually check through for any incorrect entries. You can also save a PDF of the reports, which is useful if you need to email the details to someone else in your company. All the figures in this VAT return can also be clicked on and drilled down to the actual transactions if you wish to check any figures.
Once you are happy that the figures are correct, clicking on the Reconcile button will mark all the transactions as VAT reconciled (meaning they cannot be edited in file maintenance – and when you do a clear audit trail in future years they can be deleted). You can click on Close and then Don’t reconcile if you are not ready to go ahead yet and then repeat the above steps once any corrections have been made. Once Reconciled the VAT return will appear in the list with the Submission Status showing, if you have set up the system for e-VAT submissions.
VAT Transfer and EC Sales List
The step many people miss is the VAT Transfer step. This adjusts the current VAT being paid and reclaimed from the Sales and Purchase Tax Control Accounts into the VAT liability account, and should be processed on the last day of the VAT return period.
The EC Sales list is created using the next button along, which should match the figures in box 8 of your VAT return. Car Scale Charges can also be calculated here, as well as Reverse Charge Sales Lists, if relevant. Note that some of these options are only available in Sage 50 Accounts Plus or Accounts Professional.
Submitting your VAT return through Sage
You can submit the return electronically through Sage if you have set up the e-VAT submissions options in Settings ->Company Preferences ->VAT. Highlight the VAT return that needs submitting and click the button. You then need to confirm you have the permissions to submit and the Sage system sends the return securely via the government gateway. A receipt can be printed using the HMRC Receipt button at the top right, if you need to present this to the person who actually pays the bill. This will confirm when payment is required or if you are due a refund; if you have a Direct Debit set up the funds will be taken on the 11th of the month following the return due date. It is worth setting up a Direct Debit to ensure you never forget payment and the funds stay in your account for those extra few days.
Lastly, using the Payment button you can record the details of the bank transfer or direct debit used to pay the VAT.
As I stated in my previous post on Sage how to manage your VAT, you can highlight any previous VAT return and use the View button to see the details or reprint any reports.
Many people are rightly concerned about producing VAT returns, but using the tools provided in Sage they really are quite simple to produce, as long as you take care to enter your bookkeeping details accurately. If you do your own bookkeeping, producing the VAT return as easy as click, click, print, check, submit!
For more practical tips on using Sage 50 and Sage Instant accounts take a look at the Sage Category on the Silicon Bullet Blog.