This blog post probably won’t make a lot of sense unless you read Part 1 first.
Having customised our VAT report in Xero in part 1, we’re now going to use Power Query to turn this into a journal.
Continue reading “Monthly irrecoverable VAT adjustments with Xero and Power Query: Part 2”
I asked on LinkedIn the other day whether people would be interested in my method for posting monthly irrecoverable VAT adjustments and was pleasantly surprised by the responses.
So here goes.
Continue reading “Monthly irrecoverable VAT adjustments with Xero and Power Query: Part 1.”
Here are some practical tips for accounting for VAT partial exemption on Xero.
What is partial exemption?
A basic principle of VAT is that you can only reclaim VAT that relates to “taxable supplies”. A “taxable supply” is a sale or other income line where you charge VAT. If you only sell products where you charge VAT, then you can reclaim all of your VAT as a business. However, if you have sources of income that do not attract VAT – for example residential rent or grants – then you cannot reclaim all of your VAT.
I am not going to go into further details of partial exemption methods or calculations – that’s for HMRC to explain in pages of copious guidance.
There are essentially three parts of the process. Firstly, recording the VAT correctly, secondly carrying out a partial exemption calculation and finally adjusting the VAT return. This process applies whichever system you use, however this post sets out how it applies to Xero.
Continue reading “VAT partial exemption on Xero”