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Unreconciled transactions dated before your current VAT Return period - UK

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Summary

This guide explains how to handle unreconciled transactions dated in a previous VAT period in Sage 50 Accounts.

Description

Older unreconciled transactions can occur for the following reasons:

  • This is your first VAT reconciliation in Sage 50 Accounts. Read more >
  • The previous VAT Return was not reconciled.
  • Late entries - Transactions eligible for inclusion in a VAT Return that are posted into a previous VAT period after it was reconciled. These are fine to include in your current VAT Return.

Here we explain how to check if your previous VAT Return was reconciled and how to identify any late entries that must be carried forward to your current VAT Return.

NOTE: Before following the steps in this article it is important to take a backup of your data.

Resolution

Check if previous VAT Return reconciled

  1. On the navigation bar click VAT.
  2. Check if you can see a VAT Return listed for the previous period.

If the previous VAT Return appears, it has been reconciled and you can proceed with your current VAT Return as normal, selecting to include the earlier unreconciled late entries.

NOTE: You cannot select specific unreconciled transactions to be included or not included, it must be all or none of them. If you have unreconciled transactions that shouldn't be included on a VAT return at all, they must either be assigned to a non-vatable tax code e.g. T9, or deleted if they are duplicates.

If the previous VAT Return doesn't appear, this means it hasn't been reconciled. To resolve this proceed to the following section.

Check the last VAT period values

  1. Calculate the VAT Return from the previous period, including earlier unreconciled transactions if prompted.
  2. Check the figures against the VAT Return that you submitted to HMRC. 

If the figures are the same, you can reconcile the transactions and proceed with your current VAT Return as normal.

If the values are different, proceed to the following section.

Run the late entries report

  1. Click VAT then click VAT Return.
  2. Enter the date range for the current VAT Return.
  3. Do not select the Include reconciled transactions check box.
  4. Click Calculate VAT Return.
  5. In the Earlier unreconciled transactions window, click Print, click Printer, click Run then click OK.
  6. Click Ignore, then close the VAT Return without reconciling.

We recommend you keep this report in support of the VAT adjustments you must make in the next section.

Calculate and adjust each VAT Return

You can now calculate and reconcile your VAT Return for the previous period, posting adjustments to ensure the values match what you submitted to HMRC. Then you should calculate your current VAT Return and post opposite adjustments to ensure the late entries are accounted for in this period.

  1. Click VAT then click VAT Return.
  2. Enter the date range for the previous VAT period, click Calculate VAT Return then if prompted, select to include earlier reconciled transactions.
  3. Click Make adjustments, then enter adjustments to ensure your values match the VAT Return you submitted to HMRC. Make a note of the adjustments made, then click Close.
  4. Click Reconcile VAT Return, click Yes, select the Mark as submitted check box then click Close.
  5. Click VAT Return, enter the date range for the current period then click Calculate VAT Return.
  6. Check your VAT Return figures as normal.
  7. Click Make adjustments, enter the opposite adjustments to those you noted in step 3, then click Close.
  8. Click Reconcile VAT Return, click Yes, then click Submit online.

NOTE: HMRC have strict guidelines relating to errors and declarations of late entries on VAT Returns, for further information please refer to HMRC Notice 700/45 How to correct VAT errors and make adjustments or claims available on the HMRC website at www.hmrc.gov.uk

 

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