For many UK small businesses, the flat rate scheme is by far the most efficient way to sign up for VAT. You basically pick your industry and instead of paying the normal rate, you just use the industry specific rate on your net revenue. If you the vast majority of your sales and costs are vattable then you will usually end up ahead - on the other hand if you do a lot of zero rated stuff or more than something like half a million quid of business then you need to account for the individual vat amounts
The technique I use is to have both a "vat collected" and a "vat paid" account. Sales go in one, costs go in another. This means that at the end of the quarter I can use the Trial Balance to check exactly what the paid and collected amounts were. I then net off both amounts into a "Vat Control" account which accounts for the timing difference between declaring and paying the VAT. The final transaction is then "credit checking account, debit vat control" to show the vat being paid (or received back - wohoo!). I find this very helpful because it automatically handles and highlights any invoices which are posted back into a previous quarter (which should be closed) and the difference between the VAT shown in the invoice screen and the VAT in the "vat collected" column should either be zero, or you have a basis to understand the discrepency. This way it also self rectifies through time Good luck Ed W ------------------------------------------------------------------------------ Stay on top of everything new and different, both inside and around Java (TM) technology - register by April 22, and save $200 on the JavaOne (SM) conference, June 2-5, 2009, San Francisco. 300 plus technical and hands-on sessions. Register today. Use priority code J9JMT32. http://p.sf.net/sfu/p _______________________________________________ Ledger-smb-users mailing list [email protected] https://lists.sourceforge.net/lists/listinfo/ledger-smb-users
