This article outlines how to manage Value Added Tax (VAT) receipts and payment requests in the UK for users handling their Client/Trust Accounting. It's important to understand how to issue, send, and reverse VAT receipts to ensure compliance with financial regulations. Additionally, the procedures for handling multiple payment requests will be explained.
Identifying Payment Requests and VAT Receipts
In your list of financial documents, Payment Requests are indicated with a green icon , which helps differentiate them from Invoices. Similarly, VAT Receipts also utilize a green icon
for distinction from regular Receipts.
Issuing and Sending VAT Receipts
Once a tenant makes a payment against a Payment Request, a VAT Receipt must be issued. Here's how you can send that receipt:
- Navigate to the Client Accounting hub.
- Click into View receipts.
Note: This will only show if a payment has been processed against the Payment Request and the receipt has not yet been sent. - Select either Send Emails to send it directly via email or Download as .zip if you intend to mail it physically.
A notification banner will indicate if a VAT Receipt has been previously emailed or printed, ensuring you do not send duplicates.
During bank reconciliations, you can batch-send VAT Receipts related to the reconciled payments by clicking Send VAT Receipts after the bank statement has been reconciled.
Reversing VAT Receipts
If a tenant's payment is reversed:
- A Reversal VAT Receipt is auto-generated.
- The Reversal VAT Receipt will display negative amounts to indicate the reversal.
- You can send this to the tenant. If the original receipt was never sent, the reversal doesn't need to be sent either.
- To view all VAT Receipts in relation to a Payment Request, locate the Payment Request and open it. Click on Less Payment to see the payment history, from which you can click into each Payment to access a copy of the VAT Receipt.
- To view all VAT Receipts in relation to one tenancy, navigate to the Income & Expenses page, click on Receipts
Payment Request Credit Notes
- A Payment Request Credit Note is generated when a credit note is made against a property with Payment Requests active. They differ from regular credit notes as they are not taxable.
- Credit notes cannot be allocated against Payment Requests under certain conditions, including lack of a related property assignment or when the property is not configured to use Payment Requests.
Handling Multiple Payment Requests
When reconciling bank statements:
- Currently, you can receipt only one payment request at a time. Receipt each payment request individually.
- After marking payment requests as paid, you can reconcile one bank receipt against the multiple paid requests.
- It's not possible to pay an Invoice and a Payment Request at the same time with a single payment entry. Instead, you must reconcile part against one and place the balance in a Suspense Account, then resolve against the other.
By following these steps, you'll be fostering efficiency and accuracy in managing VAT-related transactions.