VAT charged to exempt company

Mac71

I am picking up a job where another bookkeeper has left off at the minute and it looks like she was charging vat on a few invoices to a vat exempt company.

Could someone please advise me on how to sort this out so we can reclaim the vat paid from Revenue. We are using TAS books and I am not sure how to run it through the system.

Thanks

dbran

Hi

How can you sort it out?

If you are registered for VAT you have to charge VAT on all of your sales irrespective of whether they are registered for VAT, VAT exempt or not registered.

Kind Regards


dbran

J.Ryan

Do you have a VAT exemption certificate for that company, if not you charge VAT.


Quickest way to fix this is to issue VAT inclusive credit notes and then re-issue VAT exempt invoices, your company didn't pay the vat, the customer did.

J.Ryan

dbran wrote: »

Hi

How can you sort it out?

If you are registered for VAT you have to charge VAT on all of your sales irrespective of whether they are registered for VAT, VAT exempt or not registered.

Kind Regards


dbran

Certain businesses are exempt from VAT for different reasons, 1 being 90% of turnover is exports, they are issued with an exemption certificate from the Revenue Commissioners which should then be sent to all suppliers and its number quoted on all invoices.

Mac71

Hi all,

Yes they do hold a Vat exemption certificate.
The vat element of the sales invoice had not been paid by the customer so the amount has been sitting on the debtors listing this past while. Wasn't sure how to deal with this. Will try the above. Thanks for the replies.

J.Ryan

Mac71 wrote: »

Hi all,

Yes they do hold a Vat exemption certificate.
The vat element of the sales invoice had not been paid by the customer so the amount has been sitting on the debtors listing this past while. Wasn't sure how to deal with this. Will try the above. Thanks for the replies.

Ensure that you quote it on all VAT exempt paperwork issued, just double check the date it was issued, the previous may have been correct.

viztopia

Mac71 wrote: »

I am picking up a job where another bookkeeper has left off at the minute and it looks like she was charging vat on a few invoices to a vat exempt company.

Could someone please advise me on how to sort this out so we can reclaim the vat paid from Revenue. We are using TAS books and I am not sure how to run it through the system.

Thanks

If you have the vat exempt cert for the customer you can enter a vat on journal/credit note through the sales function. When you go to the tab for the amount Ho straight to the next one for the vat and enter the amount there. It will ask you if it is a vat only journal. Pm me if you need more help.

J.Ryan

viztopia wrote: »

If you have the vat exempt cert for the customer you can enter a vat on journal/credit note through the sales function. When you go to the tab for the amount Ho straight to the next one for the vat and enter the amount there. It will ask you if it is a vat only journal. Pm me if you need more help.

True, but in terms of a revenue audit, they would be better having credit notes to reverse the invoices incorrectly charging VAT and re-issuing correct VAT exempt invoices, the end result would be the same, but the paper trail would satisfy revenue.