Recording an amount due from HMRC with respect to VAT

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Overview

To record the payment due from HMRC for the input VAT amount, we need to create an accounts receivable entry due from HMRC and an entry to reduce the VAT liability that has accrued during the period. 

The next step would be to receive the payment from HMRC as, effectively, a post-appointment debtor.

Recording an amount due from HMRC with respect to VAT

1.    Select Transactions > New Credit Sale/Asset Realisation as shown:

File:test/insolvency/150_13+VAT+Wizard/040_Recording+an+amount+due+from+HMRC+with+respect+to+VAT/VATPay1.png

2.    Enter the transaction details:

Field

Value

Customer Name

HM Revenue and Customs

(This should be listed as a Counterparty in the database)

Memo

VAT for the period xxx to xxx

Account

VAT Control: VAT Paid (Received)

Tax Code

<blank>

Net

901.40

Tax

0.00

Total

901.40

Your screen should resemble the one shown below:

File:test/insolvency/150_13+VAT+Wizard/040_Recording+an+amount+due+from+HMRC+with+respect+to+VAT/VATPay2.png

3.    Click [Next].

This transaction has the effect of reducing the accrued VAT for the period to nil, as can be seen from the balance on the VAT Control account in the screen below.  There is also an Account Receivable entry for HMRC when the repayment of VAT is received.

File:test/insolvency/150_13+VAT+Wizard/040_Recording+an+amount+due+from+HMRC+with+respect+to+VAT/VATPay3.png

Once the payment from HMRC is received, the process is completed as follows.

4.    Select Transactions > Receive Debtor Payment as shown (right):

File:test/insolvency/150_13+VAT+Wizard/040_Recording+an+amount+due+from+HMRC+with+respect+to+VAT/VATPay4.png

5.    Click the Customer drop-down.

The awaited payment from HMRC should be shown (right):

If more than one debt is awaited for this job, more than one entry will be shown.

File:test/insolvency/150_13+VAT+Wizard/040_Recording+an+amount+due+from+HMRC+with+respect+to+VAT/VATPay5.png

The details of the awaited payment will be shown in the Outstanding Invoices section of the screen:

File:test/insolvency/150_13+VAT+Wizard/040_Recording+an+amount+due+from+HMRC+with+respect+to+VAT/VATPay6.png

Note

If more than one repayment is awaited from HMRC, these sums will also be shown here.  Only the repayment relating to the cheque received from HMRC should be selected in the next step.

6.    Complete the following fields:

Field

Value

Amount Paid

901.40

Memo

Payment received for VAT 100 for period 1 June to 31 August 2013

It is not necessary to complete the memo field but, as there is no direct link between the original VAT entry and this entry, it is recommended to identify the received payment in this way.

The other fields, Cheque No / Ref, Pmt Type and Bank Details, may be completed as necessary.

Note

When the Amount Paid was entered, the Payment field in the Outstanding Invoices was automatically entered.  The figure received can be amended by clicking the Clear Payments button and/or entered in full by clicking the checkbox against the transaction entry.

Your screen should look similar to that shown below:

File:test/insolvency/150_13+VAT+Wizard/040_Recording+an+amount+due+from+HMRC+with+respect+to+VAT/VATPay7.png

Click [Save and Exit] to leave this screen.

7.    Review the following accounts to see how the above transactions have affected the accounts.  You should see that

  • The VAT Control account is now zero (no further monies are due to or payable from HMRC.
  • The VAT Paid (Received) account is showing (901.40), indicating the payment received from HMRC.
  • The Debtors (Non-Trading)(Post-Appointment) account is zero.
  • A credit of £901.40 is in the default bank account.

File:test/insolvency/150_13+VAT+Wizard/040_Recording+an+amount+due+from+HMRC+with+respect+to+VAT/VATPay8.png

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