VAT - Support multiple VAT accounts for control and suspense
Can the VAT account be split into two, a method that Sage utilises?
A vat control account and a VAT suspense account.
The VAT suspense account will show the balance of the Dr or Cr of vat payable or owing from transactions included in the VAT return, this is where the Vat payments to/from HMRC are posted.
The VAT control account shows the balance of transactions where input/output VAT has been realised from invoices raised/received, but are not yet included in the VAT return typically because the the company is operating the VAT cash scheme.
These two accounts could be triggered when the VAT cash scheme is selected in the financial settings, and remain the same as it is now with the one VAT account when the accrual scheme is selected.
Robert Smith
shared this idea
Hi Robert, being upfront this isn't something we have any intentions of changing in the near term. We will continue to track interest in your idea here for the time being but would be quite a fundamental change to the way tax works in Xero.
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Nicola Conlon
commented
I too find this very frustrating. Quickbooks, Sage et all have VAT control accounts. The Xero method of dumping it into one COA may work for very simple businesses. However, as a Bookkeeper it adds a tremendous amount of time to my workload as we have to complete this manually. Whilst it may not be a flashy, AI item that is attractive for marketing purposes, adding something like this will draw more accounting professionals to the software.
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Robert Smith
commented
Many thanks for your response.
I appreciate there may not be any immediate plans but is invaluable to an accountant to be able to effectively reconcile the VAT account when the entity is operating the cash VAT scheme, to be able to split out realised and unrealised VAT.