Club accounts invoice
Discussion
I have just started doing the accounts for a club that is not VAT registered (although it might becaome VAT registered at some point.
Should I post supplier invoices onto the accounts package (Sage) and account for the VAT?
The previous person posted the gross invoice value to zero VAT, but this doesn't seem right.
TIA
Should I post supplier invoices onto the accounts package (Sage) and account for the VAT?
The previous person posted the gross invoice value to zero VAT, but this doesn't seem right.
TIA
Thank you.
If the club starts trading at a volume that warrants it being VAT registered, do invoices have to be reposted?
I can't comment on the tax position, as I am working my way through year so far invoicing etc. and trying to correct the errors. I haven't looked at anything else yet (not even completed a month end).
If the club starts trading at a volume that warrants it being VAT registered, do invoices have to be reposted?
I can't comment on the tax position, as I am working my way through year so far invoicing etc. and trying to correct the errors. I haven't looked at anything else yet (not even completed a month end).
Regarding VAT, if the club starts "trading" and generating trading income over the current VAT Registration threshold (£67,000 per annum), then it will have to register. What constitutes "trading" in the context of a club or society depends on what the club has been set up to do and how it operates.
Non "trading" income should be ignored when working out the club's turnover threshold. Examples of "non-trading" income would be Bank Interest received or investment income from other sources.
If a club does need to register, it would normally not have to redraft any of its accounting postings from the period before which it had to register. However, it could find it beneficial to reclaim VAT on some costs that were incurred in a time period of three years prior to the VAT registration date. This would normally allow the club to reclaim the VAT on capital costs (i.e. equipment, machinery etc) it purchased in that three year period.
Non "trading" income should be ignored when working out the club's turnover threshold. Examples of "non-trading" income would be Bank Interest received or investment income from other sources.
If a club does need to register, it would normally not have to redraft any of its accounting postings from the period before which it had to register. However, it could find it beneficial to reclaim VAT on some costs that were incurred in a time period of three years prior to the VAT registration date. This would normally allow the club to reclaim the VAT on capital costs (i.e. equipment, machinery etc) it purchased in that three year period.
Just a pointer on some other areas.
If the club's bank accounts pick up bank interest credits, this money should be paid into the bank account(s) with NO tax deducted at source. Banks often get this wrong and take tax out of the interest at 20%. This type of tax deduction at source on interest received only applies to individuals, not companies, clubs or societies.
Clubs are actually liable to Corporation Tax on interest received. However, if you contact your local tax office you might be able to obtain a written dispensation from the Revenue obviating the need for the club to complete a Corporation Tax return and paying over any tax due on bank interest received.
If the club's bank accounts pick up bank interest credits, this money should be paid into the bank account(s) with NO tax deducted at source. Banks often get this wrong and take tax out of the interest at 20%. This type of tax deduction at source on interest received only applies to individuals, not companies, clubs or societies.
Clubs are actually liable to Corporation Tax on interest received. However, if you contact your local tax office you might be able to obtain a written dispensation from the Revenue obviating the need for the club to complete a Corporation Tax return and paying over any tax due on bank interest received.
I noticed tax is deducted on interest on one of the accounts, I haven't found the statements for the others yet.
The groundwork is taking much longer than I expected.
The club is a supporters one, transactions are increasing with the popularity. I am guessing a chat with the local VAT office might be a good thing.
The groundwork is taking much longer than I expected.
The club is a supporters one, transactions are increasing with the popularity. I am guessing a chat with the local VAT office might be a good thing.
Giving away the profits doesn't count on its own, I'm afraid. If the club is set up with a purpose which shows that it is benefitting or educating the community or society in general, it may be able to acquire charitable status.
Clubs and societies are liable to Corporation Tax on their profits and are supposed to notify HMRC when they are established.
If they are registered charities, they are exempted from tax on their profits.
Clubs and societies are liable to Corporation Tax on their profits and are supposed to notify HMRC when they are established.
If they are registered charities, they are exempted from tax on their profits.
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