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
Thanks for explaining what you’re trying to achieve. We’re moving this idea to Gaining Support so others with the same need can add their support and feedback.
To clarify, in Xero, cash and accrual are reporting options rather than separate sets of transactions or tax-account balances. Accrual reporting recognises income and expenses when they’re earned or incurred, while cash reporting recognises them when payment is received or made.
This means the same transactions can be viewed differently depending on the reporting basis selected. The tax account remains a single ledger account, and the tax basis can differ from the basis used for financial reports.
For the cash-basis visibility you’re looking for, the relevant reports can be run on a cash basis and filtered to the tax account where needed. The tax reconciliation report can also help reconcile the cash-basis amounts back to the single tax account.
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Tammy Fleming
commented
This is crazy many company's are registered for vat in various country's I spend hours on the Irish company's vat as they have a UK vat registration too the worst is trying to get the sterling value to tie up with VAt reports as the main summary only shows Euros
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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.