More Sage pain
Discussion
It hurts so it must be doing me some good 
I'm trying to pay myself some expenses and claim the VAT back.
I'm entering the amounts in the Journal using a nominal ledger code with the nett amount first allocated to the as a T1 VAT rated amount. I'm then entering the VAT component separately against the Purchase tax account (2201)as a T9 amount....
Then I put in a balancing credit to my directors loan account (T0).
Obviously I'm doing something wrong as the VAT owing isn't decrementing against the liability.
So how should I be entering things correctly?
Also, what T code should I use for zero rated transactions.
I'm trying to pay myself some expenses and claim the VAT back.
I'm entering the amounts in the Journal using a nominal ledger code with the nett amount first allocated to the as a T1 VAT rated amount. I'm then entering the VAT component separately against the Purchase tax account (2201)as a T9 amount....
Then I put in a balancing credit to my directors loan account (T0).
Obviously I'm doing something wrong as the VAT owing isn't decrementing against the liability.
So how should I be entering things correctly?
Also, what T code should I use for zero rated transactions.
Might as well get all of the questions out of the way in one go.
Open up a mew Supplier Account called "Director's Expenses Account".
Enter a purchase invoice as you would a normal purchase invoice covering these "Expenses" and split the VAT Exclusive and VAT content as you would for a normal invoice. If you complete some sort of standardised Expenses Claim Form (highly recommended), then you could actually post this through the Purchase Ledger system as the VAT invoice (with the actual VAT vouchers for the original costs stapled to the expenses claim form/expenses invoice to satisfy the VAT requirements).
This will take care of the posting of the expenses to the relevant nominal ledger headings and will also take care of the Input VAT claims (where appropriate) on these expenses.
Your purchase ledger account will now show a balance owing on the "Director's Expenses Account". If you settle the balance by paying from the bank, then treat the bank payments as a normal suppliers payment. The account will then become zero.
If you do not intend to pay yourself the exact amount owing on the ledger account, clear the balance by means of a Dummy Purchase Credit Note making sure that the Nominal Ledger posting goes to Directors Current Account, Directors Loan Account or a Nominal version of a Directors Expenses Account. This balance on this account can then be cleared at your leisure.
Enter a purchase invoice as you would a normal purchase invoice covering these "Expenses" and split the VAT Exclusive and VAT content as you would for a normal invoice. If you complete some sort of standardised Expenses Claim Form (highly recommended), then you could actually post this through the Purchase Ledger system as the VAT invoice (with the actual VAT vouchers for the original costs stapled to the expenses claim form/expenses invoice to satisfy the VAT requirements).
This will take care of the posting of the expenses to the relevant nominal ledger headings and will also take care of the Input VAT claims (where appropriate) on these expenses.
Your purchase ledger account will now show a balance owing on the "Director's Expenses Account". If you settle the balance by paying from the bank, then treat the bank payments as a normal suppliers payment. The account will then become zero.
If you do not intend to pay yourself the exact amount owing on the ledger account, clear the balance by means of a Dummy Purchase Credit Note making sure that the Nominal Ledger posting goes to Directors Current Account, Directors Loan Account or a Nominal version of a Directors Expenses Account. This balance on this account can then be cleared at your leisure.
I think you could still do that using my method.
When completing your P11d you will need to show on the form all Expenses claimed by you in the year to 5 April 2007 categorised by expense type but analysed "VAT Inclusive" rather than "VAT Exclusive". A review of the entries made to your "Director's Expense Claim" suppliers account will give you the totals required.
Don't forget that Sage is primarilly a book-keeping/accountaing piece of software so wants to provide data in a format compatible with accounting and book-keeping requirements.
Breakdowns of expenses claimed by directors and higher paid employees for P11d completion are not in the normal formats required for book-keeping.
For simplicity sake, I prefer ALL my Input VAT processing to go through the Purchase/Supllier Ledger, that means that a simple summary of your Purchase Day Book (Invoice and Credit Notes) will always give you the correct total Input VAT being claimed.
It also massively simplifies the VAT entries as the VAT is calculated automatically as each entry is made (as for normal Purchase Invoices/Credit Notes).
When completing your P11d you will need to show on the form all Expenses claimed by you in the year to 5 April 2007 categorised by expense type but analysed "VAT Inclusive" rather than "VAT Exclusive". A review of the entries made to your "Director's Expense Claim" suppliers account will give you the totals required.
Don't forget that Sage is primarilly a book-keeping/accountaing piece of software so wants to provide data in a format compatible with accounting and book-keeping requirements.
Breakdowns of expenses claimed by directors and higher paid employees for P11d completion are not in the normal formats required for book-keeping.
For simplicity sake, I prefer ALL my Input VAT processing to go through the Purchase/Supllier Ledger, that means that a simple summary of your Purchase Day Book (Invoice and Credit Notes) will always give you the correct total Input VAT being claimed.
It also massively simplifies the VAT entries as the VAT is calculated automatically as each entry is made (as for normal Purchase Invoices/Credit Notes).
Regarding the "Journal" approach, Sage expects VAT to be declared and claimed through their "Control Account" headings i.e the Sales Ledger Control Account, the Purchase Ledger Control Account, the Sales VAT Control Account and the Purchase VAT Control Account. Therefore, it expects the prime entries for VAT purposes to be mainly -
Sales Invoices
Purchase Invoices
Sales Credit Notes
Purchase Credit Notes
It WILL process VAT on Bank Receipts, Cash Receipts, Bank Payments and Petty Cash Payments as they also are processed through their "Control" account set up i.e bank control account and Petty Cash control account.
However, Sage does not expect Journal Entries to be made directly to control account headings. If they are made, they can play havoc with reconciling these accounts, particularly in respect of Trade Debtors, Trade Creditors, Sales VAT account and the Purchase VAT account.
If you REALLY want to post a journal directly to a VAT account, the safest one to post it to is the VAT Payable account.
As you probably know, every VAT quarter you should transfer the Sales VAT and the Purchase VAT totals for that quarter to the VAT Payable account. The balance showing in the VAT payable account should represent the Net VAT due for the quarter. This account should only ever show one VAT quarter's liability at any given time - or Nil, if the payment has been made.
Sales Invoices
Purchase Invoices
Sales Credit Notes
Purchase Credit Notes
It WILL process VAT on Bank Receipts, Cash Receipts, Bank Payments and Petty Cash Payments as they also are processed through their "Control" account set up i.e bank control account and Petty Cash control account.
However, Sage does not expect Journal Entries to be made directly to control account headings. If they are made, they can play havoc with reconciling these accounts, particularly in respect of Trade Debtors, Trade Creditors, Sales VAT account and the Purchase VAT account.
If you REALLY want to post a journal directly to a VAT account, the safest one to post it to is the VAT Payable account.
As you probably know, every VAT quarter you should transfer the Sales VAT and the Purchase VAT totals for that quarter to the VAT Payable account. The balance showing in the VAT payable account should represent the Net VAT due for the quarter. This account should only ever show one VAT quarter's liability at any given time - or Nil, if the payment has been made.
t1
DOn't get hung up on the t numbers, it's simple really:
t0 = doesn't auto calc VAT but net amount included in VAT return.
t1 = Vat calculated (but can be over-riden) - included in VAT return.
t9 = no VAT and not included in VAT return.
Other than the VAT summaries, the t codes have very little effect on things.
DOn't get hung up on the t numbers, it's simple really:
t0 = doesn't auto calc VAT but net amount included in VAT return.
t1 = Vat calculated (but can be over-riden) - included in VAT return.
t9 = no VAT and not included in VAT return.
Other than the VAT summaries, the t codes have very little effect on things.
BliarOut said:
I can see a 1w light bulb flickering somewhere
So food/subsistence is T9 for example?
So food/subsistence is T9 for example?
Edited by BliarOut on Wednesday 7th February 17:13
yep.
Postage, for example, would be t0, as this is a zero rated item and you want the net amount including in box 6 of your VAT return.
Petrol it t1, as is stationery, repairs, telephone etc. etc.
A loan repayment would be t9, but a bank charge would be t0.
Does that help?
It all balances 
Now I've got an amount sat in my Directors Loan Account (Short term liability, code 2110) How do I allocate that payment within Sage so I can actually pay it to myself? It's on three seperate journal entries (one per month) can I lump these payments together and just make one BACS payment to myself?
I don't currently have an actual personal account set up within Sage to transfer it to, just the business ones.
Now I've got an amount sat in my Directors Loan Account (Short term liability, code 2110) How do I allocate that payment within Sage so I can actually pay it to myself? It's on three seperate journal entries (one per month) can I lump these payments together and just make one BACS payment to myself?
I don't currently have an actual personal account set up within Sage to transfer it to, just the business ones.
Eric Mc said:
I think you could still do that using my method.
You can. It's so much easier than trying to do it through journals, Rob. If you want to see where YOU specifically are spending money on the business, you can always set up nominal codes like "Expenses Stationery", "Expenses Petrol" etc, but I'm not sure whether it's really necessary to do that because you can do reports on the nominal codes to see where you're spending your money.
Edited by Mrs Trackside on Thursday 8th February 11:27
Gassing Station | Business | Top of Page | What's New | My Stuff