I live in UK and are subject to VAT. According to the HMRC web site:
it says: Using cash accounting, you do not need
to pay VAT until your customer has paid you. If your customer never
pays you, you never have to pay the VAT.
My VAT period is from October 1st to January 31st. I have a job which is completed after January 31st but I have made purchases for that job before that period. How do I tell Manager to not include those items until I have been paid by the customer?
If you are on cash-basis, you claim VAT on purchases when you pay suppliers. It is irrelevant that purchases were part of the job that customer didn’t pay for. You can still claim VAT that you paid to suppliers.
When generating “Tax summary” report, make sure it is set to “Cash-basis”. This tells Manager to calculate VAT figures based on when you actually paid suppliers and when you received money from customers.
Lubos, I’m sorry for dragging this old post up again.
Here in Ireland we have an option of accounting for VAT on a cash basis.
It’s slightly different to the scenario you have outlined.
I will try to explain:
VAT on sales is accounted for on a cash basis (i.e. vat becomes payable when the invoice is paid)
VAT on purchases is accounted for on an accrual basis (i.e. VAT becomes receivable when the invoice is issued)
Is there any way you can adjust the Irish tax codes to reflect this option? It would make my life a lot easier!
This is a link that may explain it better: http://www.mcgovern.ie/?p=953
Thanks
@a_s_pamplin, this is not supported however there are going to be certain improvements to workflow later this year which will make this much easier to handle.
You can print the Tax Summary for the same period on both the cash and accruals basis and extract VAT on sales from the cash basis report and VAT on purchases from the accruals basis report.
Brilliant! Never thought of that. Thank you!