Handling VAT in the UK

[peterf]

Have just bought your excellent software and am migrating from my spreadsheets to your software. Read an old thread on handling VAT which I would like to bring back to life.

I operate as an independent management consultant in the UK. Any expenses incurred by the business (on behalf of the business or in service of its clients) include VAT (sales tax) if applicable. I need to be able to do two things:

1. Keep a record of the VAT included in the cost of all expenses - so I can then reclaim this from the authorities
2. Keep a record of the excluding VAT cost of all expenses since I am obliged to invoice VAT on all expenses to my clients

It would be great if the software could separately hold net cost and VAT paid. I also need to flag whether the VAT paid is recoverable from the authorities. So I could then raise a report or an invoice showing me the total recoverable VAT by expense. For expenses charged through to clients I bill through the net cost plus VAT.

The VAT charged to clients is different from the VAT paid as part of the expense cost. This can be for two reasons:

a. The VAT recoverable can be less than the standard rate on an expense, but the VAT charged through is the standard rate.
b. If I made a margin on the expense (which I dont) then the VAT chargeable would always be greater than the VAT paid


Any suggestions on how I can best keep track of what I can reclaim from the authorities, and make sure I bill the right amount of VAT

[peterf]

Thinking about this overnight.....the software as is is designed to be able to handle company expenses to be billed to clients....rather than personal expenses to be re-imbursed by the company of which some will be billable to clients.

In an ideal world you would have an expenses functionality which allowed the user to input the gross expense incurred, the (sales/VAT) tax paid, whether the tax was reclaimable the company, whether the (net of tax) expense was billable to the client (and which client), what mark up would be charged on the net expense as it was charged through to the client, whether the charge levied on the client was taxable (on the invoice).

This should easily integrate with the current system obviating the need for me and others to use one system for managing personal expenses and then having to re-enter all chargeable expenses into your system.

 

[Adam]

Hi Peter,

I'm not sure if this would work for you but you can use the "Cost" field in the Expense to enter your "gross expense" (that is what that is for).  You would enter in the Amount field the amount you need to charge the Client.  If on the Invoice, you need to charge the VAT on that amount, you would need to "check" the "Taxable" field.  You can run a Report (CSV option turned On) and sum the Cost field in a spreadsheet and hopefully work out what you need to do with that.  Thoughts?

[peterf]

Adam, thanks for the reply. Yes I think I could enter the amount of VAT I can reclaim in the Cost filed - export that and then add it up in excel. More of a workaround than an elegant solution though.

I have now also bought XpenseTracker from Silverware software - which does all the data collection and VAT handling but has no reporting functionality. So I will now find myself exporting a CSV file from XpenseTracker to a csv file - manipulating it in Excel to work out what I can claim back from my company and what my company can claim back form the VAT authorities. I will then manually load these expenses that can be charged through to clients into your software to be able to create the invoices.

Essentailly use XpenseTracker to log my personal expenses - and TimeMaster to track billable expenses/time and then invoice.

In an ideal world I would have the two apps in one - something to add to your development wish list?

Thanks for your support again - really like the App

[dpeace]

I realise I'm replying to a very old thread here, but I've found running Time Master alongside Easy Books the best solution for me. Easy Books pretty much does my tax return figures and VAT returns for me, and has lots of useful reporting built in.

It does require me to enter data into both programs, though, which is not an irritation for me as most of what I charge is time. I like the way that I can keep entirely separate what I actually spend and what I charge as a consequence of that expenditure.

Easy Books has obviated my need for both Sage and an accountant!

Darren