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



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?


Parents Reply
  • 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.