x Want to participate? Join the group to interact
Options
  • State Not Answered
  • Replies 4 replies
  • Subscribers 5 subscribers
  • Views 1886 views
  • Users 0 members are here
Browse Forums
Announcements
762
topics
17
replies
Financial year end
77
topics
178
replies
General Discussion UK
7k
topics
19k
replies
General Discussion Ireland
173
topics
308
replies
Install your software
134
topics
367
replies
Making Tax Digital
285
topics
691
replies
Manage your VAT
146
topics
320
replies
Protect and repair your data
43
topics
135
replies
Run your accounts remotely
84
topics
196
replies
Working with the bank
114
topics
292
replies
Sarah Daly

Making Tax Digital

Posted By

Hi,

I have just submitted my 3rd quarter VAT return via the Making Tax Digital software.

There was a refund of £750.00 for an invoice on the Credit Card statement so this transaction was input into Sage as a 'VR' transaction.  This is a purchase credit and should have appeared as a deduction in Box 7 - Total value of purchases, excluding VAT but instead, it appeared in Box 6 as a Sale.  I have had to adjust this before submitting to HMRC as it is clearly not a Sale.

Can this be amended in the Making Tax Digital software please so that Credit Card refunds are treated in the same way as Purchase Credit notes and not as a Sale?

Many thanks

Sarah Daly

  • 0

    Hi Sarah,

    Thanks for using Sage City.

    A VR is a Visa Receipt. As it’s a receipt into your business, it’s treated as a sale.

    Which VAT scheme are you using, e.g. Standard VAT, VAT Cash Accounting, etc?

    Regards,

    Paul

    Sage UKI

  • 0 in reply to Paul Morgan

    Hi Paul,

    Thank you for your response. 

    The VAT scheme is Standard VAT. 

    A refund for a purchase is not a sale just as a credit note for a credit purchase is not a sale (these are deducted from the purchases figure) and surely the same logic should apply?  The original purchase is included in the purchases figure (from the purchase ledger) so when it is refunded either in full or in part, it should be offset in the purchases figure as a purchase credit note would and not show as a sale?

    Please advise.

    Many thanks

    Sarah Daly 

  • 0 in reply to Sarah Daly

    Hi Sarah,

    Since the transaction posted is a Visa Receipt (VR) it's no linked to an invoice or a supplier in the software and there's nothing to instruct the software that it's a refund, it's therefore treated as income and affects Box 6 on the return.

    There are a couple of existing approaches, or you may indeed want to request a change.

    You can make manual adjustments to the figures, as you have done in this case. An alternative would have been to set the Supplier up with a Supplier Record and an invoice that could have been paid by the credit card. At the point of refund you could then post a batch credit and then a supplier refund. Full details of these steps are available in the following article:

    https://ask.sage.co.uk/scripts/ask.cfg/php.exe/enduser/std_adp.php?p_faqid=32146

    In the article, Choose Suppliers > Purchase invoice (PI) > Paid > Standard VAT > The purchase invoice needs to be credited and the purchase payment refunded.

    If you'd like to suggest a change in the software, you can log this as a suggestion. To do this, sign in to https://sagecity.na.sage.com/gb > select the relevant product > click the Ideas option from under the heading > click ‘+New’.

    Regards,

    Andy

    Sage UKI

  • 0 in reply to Andy Rickeard

    Hi Andy,

    I will make the suggestion for a change, thank you.

    Kind Regards

    Sarah Daly

*Community Hub is the new name for Sage City