Active discussions

Meet the Other Phone. Protection built in.

Meet the Other Phone.
Protection built in.

Buy now

Please or to access all these features

Talk
Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Original poster

Xero Vat Return - Advice please

30 replies

BellaCiao1 · 08/04/2023 13:30

Hi I do the accounts for my brother who is a self employed tradesman. Previously I had been doing them on spreadsheets and I found this very straight forward. Due to MTD I have set up Xero and have linked this to HMRC (haven't linked to bank account yet - the bank account is his personal one and finances are all entwined, he is currently setting up a separate business account).

There are a few VAT returns outstanding from the MYD was introduced back last year and due to a few reasons we are only getting around to it now - we are aware there are late claim penalties.

At the moment he uses his own invoice software and I record all bills/expenses on a spreadsheet and have kept all receipts. We are going to keep this method for the next few months just until we get time to switch everything else over to Xero.

I would really appreciate any advice on how to file for a VAT return on Xero - as in what is the least amount of information I have to upload (it's all from last year) and going forward I'll update it as I go.

I hope this makes sense to those in the know! Thank you

Basica

OP posts:
MattTebbuttsDenimShirt · 08/04/2023 17:19

AssignedNorthern · 08/04/2023 17:07

Yes this will be the reason the vat return is not pulling the figures through. If you are cash accounting for vat everything is worked from the date of payment or receipt so all the expenses you've marked as paid today would appear on your return including April 2023.

It sounds like you have entered all the invoices via the expenses app and therefore Xero thinks that you have paid these costs personally so when you are marking them as paid Xero thinks a payment to reimburse you has been sent.

This - you need to create an outgoing expense payment for BellaCiao so that when you mark as paid, it reconciles from owing to paid, rather than they owe you money.

Original poster
BellaCiao1 · 08/04/2023 17:43

AssignedNorthern · 08/04/2023 17:07

Yes this will be the reason the vat return is not pulling the figures through. If you are cash accounting for vat everything is worked from the date of payment or receipt so all the expenses you've marked as paid today would appear on your return including April 2023.

It sounds like you have entered all the invoices via the expenses app and therefore Xero thinks that you have paid these costs personally so when you are marking them as paid Xero thinks a payment to reimburse you has been sent.

So rather than putting them through as expenses I should enter them as invoices?

OP posts:
Original poster
BellaCiao1 · 08/04/2023 17:52

MattTebbuttsDenimShirt · 08/04/2023 17:13

I always enter every salesnvoice manually, same with purchase invoices.

When linked to the bank account all you need to do is click a button to reconcile.

But you need to know the VAT for utilities, postage, bank charges etc...

If you can do all that on paper you should be fine just entering as one sum. I like to see it all though to correct any errors.

I am good at spreadsheets and collating/organising information, so in the the past it was straight forward as you just had to put the totals into HMRC to calculate everything.

A lot of the accounting specific terminology on Xero is confusing me at the moment. I think I might get him to hand it over to an accountant to sort out things so far and then maybe I could take over again. I do enjoy that sort of thing but just until it is all set up I do think I may be out of my depth here!

OP posts:
MattTebbuttsDenimShirt · 08/04/2023 19:08

BellaCiao1 · 08/04/2023 17:52

I am good at spreadsheets and collating/organising information, so in the the past it was straight forward as you just had to put the totals into HMRC to calculate everything.

A lot of the accounting specific terminology on Xero is confusing me at the moment. I think I might get him to hand it over to an accountant to sort out things so far and then maybe I could take over again. I do enjoy that sort of thing but just until it is all set up I do think I may be out of my depth here!

Show quote history

It is tricky when you don't know the software - especially when you haven't got much time for. VAT return.

If you have the figures to enter in to profit loss, or chart of accounts - as long as all VAT correct should be okay.

You also can quite easily upload your spreadsheet into Xero. Have a look at that. As long as your columns match theirs i.e column 4 sales invoices, 5 purchase invoices. I've done it before but it was a while ago.

Have a look on their help site. I managed to get the hang of it quite quickly. Is this his first time submitting? HMRC have required digital for a few years now unless self employed, VAT exempt... Then you just put the numbers in.

Sounds stressful, you need someone to help you Xero. I much prefer to QuickBooks tho!

Oh good luck, you don't need this on your Easter weekend! X

taxguru · 08/04/2023 19:30

It sounds like you're out of your depth with proper software such as Xero.

Why not try VTSoftware instead (you can download a free "cash book" version) which has much simpler data entry and also facilities VAT returns RTI submissions. You can have a simple data entry screen which is like a spreadsheet, where you just enter payment date, supplier name and then split the total paid into input VAT and net with a drop down list of analysis headings such as purchases, fuel, repairs etc.

We recommend it for lots of our clients who don't need the "all singing, all dancing" software with Xero or Quickbooks, and use it inhouse for all our in house book-keeping clients as it's so quick and simple!

New posts on this thread. Refresh page