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Post Info TOPIC: Credit note to directors loan does not include tax on directors loan nominal
Davina


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Credit note to directors loan does not include tax on directors loan nominal
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Hi, director paid for equipment before company started, entering those onto Sage and recording a credit note as invoice paid by director, however the credit note does not include the VAT amount so makes his balance less??  Any suggestions

 



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Leger


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Hi Dvina, where was the original invoice coded to?  (Both sides of the transaction please)



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 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Davina


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Original invoice was entered as equipment 0022, then I entered a credit note from 2303 directors loan as director paid.  Amount was 149.98 (124.99 +24.99 VAT) however the 2303 only showed the 124.99 although the director paid the entire £149.98

Thank you 



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Leger


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Davina wrote:

Original invoice was entered as equipment 0022, then I entered a credit note from 2303 directors loan as director paid.  Amount was 149.98 (124.99 +24.99 VAT) however the 2303 only showed the 124.99 although the director paid the entire £149.98

Thank you 

 

Hi Davina.  Sorry, I've been away for a week hence belated reply.  When you entered the original invoice as 0022 what was the other side of the double entry?

 



-- Edited by Leger on Sunday 8th of May 2022 12:00:11 PM

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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Caspar


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Hello Davina

 

I would enter this differently.

1. I would enter the invoice including VAT, (lets say it was £100 plus £20 Vat) the the correct nominal it was purchased against,

2. Then bring £120 into petty cash as a Bank Receipt from the Directors Loan account code, using a tax code that means the bank receipt does not form part of the VAT return, such as T9 in Sage.

3. Then Make a Bank Payment from Petty Cash against the Invoice in full £120.

This clears the Petty Cash out, clears the invoice as being paid and brings in the expense and the VAT, and also puts the Directors Loan Account in Debit by £120

I hope this helps, as I have only logged in recently to see this from April.

Caspar



-- Edited by Caspar on Friday 20th of May 2022 04:30:33 PM

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HarryStottle


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Why not miss out one of those steps and simply make a payment from the DLA against the invoice for the full £120.

(note - some accounting systems need you to amend the settings of the DLA account to allow payments in and out)

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