Help and ideas for busy numbers people
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.”I’m adding a quick post about accounting for retentions payable in Xero because I couldn’t find an article explaining it.
Continue reading “Accounting for retentions payable in Xero”Here are some practical tips for accounting for VAT partial exemption on Xero.
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”
I had a fun challenge recently – accounting for a property purchase in Xero where a third party had paid grant funding directly to the vendor. As it took me a while to work it out, and I couldn’t find what I was looking for online, I thought I’d set it out here.
Some of this advice also applies if you need to account for any kind of purchase where a third party has paid the supplier directly. Or if you are accounting for a property purchase in Xero where you have already paid a deposit but only received an invoice at completion. This post assumes that you have reasonable prior knowledge of accounting for invoices, bills, receipts and payments in Xero.
Continue reading “Accounting for a property purchase in Xero – partly paid by direct grant to vendor”
Even small charities can have big complexities when it comes to choosing and using accounting systems.
There are two issues in particular which can be hard for charities to deal with on many accounting systems. The first is VAT partial exemption. Charities may have a mix of exempt income (grants, donations) and taxable income (eg selling goods or running a cafe). This means that they cannot reclaim all of their VAT and have to do “partial exemption” calculations.
Continue reading “Yes, Xero is a good accounting system for charities”