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STX_AKM

How would purchase invoices that are generated via stock receipts ever post in UK VAT Box 7 (B7)?

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Hi

In the default set up, the following occurs:

Stock receipt - debits stock and credits GRNI

Invoice for receipt - debit VAT purchases (vat element), debit GRNI to balance it to 0 and will credit 320000 Purchase ledger control for the full amount.

Since the invoice is the part that it looked at for the B7 box, nothing goes into it. the vat element is successfully picked up in B4, but none of the other invoice accounts are by default set to tax management - managed.

But the rules on the B7 box should be that all of that purchase invoice would be submitted excluding the VAT element. So it should be posting the amount from either the stock receipt, or the amount from GRNI on the purchase invoice. 

I'm going to test some different scenarios but found it odd that a fresh install of Sage, posting a transaction, incorrectly had the VAT B7 box wrong. Other, more important boxes, are fine.

Anyone else notice this?

Thanks

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  • 0 in reply to Kingy

    No, by the default set up GRNI isn't subject to tax. Is that what stock receiving companies generally change to make B7 work? I'm dubious, that account is debited and credited to be 0 mostly. Would not both debits and credits then post to B7 and therefor not work? Or does it only take the purchase side of the transaction into account when doing the tax extract?

  • 0 in reply to STX_AKM

    Credit posting to GRNI is generated by the stock posting and will not generate a tax posting.

    You need both a VAT line and a Basis line, in a journal, to create data for the VAT return.

  • 0 in reply to Kingy

    Thanks Kingy, I will test this out in SEED and see if there are any other implications setting that to purchase deductible. 

    "You need both a VAT line and a Basis line, in a journal, to create data for the VAT return." - interesting on this though, even though currently the purchase line doesn't have a basis line, in this case GRNI but it's not subjected, B4 still works for the correct amount posted to the VAT.

  • 0 in reply to STX_AKM

    But as you have discovered you need both lines to populate the VAT return correctly.

    Hope the test works for you

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