Don't have time to read, watch the instructional video here:
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We recommend you bookmark these Digital VAT helpdesk articles located here.
We recommend you calculate your VAT using the Period Method as it is the most accurate method and allows you to use multiple VAT accounts instead of just one VAT account code for the duration of your entire production.
To do this close the period at the end of each VAT reporting period and use the period range to group transactions. You can see further instructions on how to do this here.
If you are wanting to setup and use multiple VAT account codes for each submission, please see this guide here. Normally, the Eclipse MTD Module will only accept one VAT account code per submission unless you follow the above guide to setup your VAT accounts (eg using monthly VAT accounts but submitting VAT quarterly).
If you are using the Date Method or Reconcile Method to calculate your VAT, you must only use ONE VAT Account for your entire production. You cannot split the VAT Accounts into quarterly or monthly accounts as these calculation methods are not compatible. The Period Method allows you to use multiple VAT Accounts.
A lot of users use a date range to calculate VAT but a word of warning. Even though Eclipse warns users that a date being posted is outside the threshold set in system defaults, some users still manage to post transactions into the distant future or past. The problem is that those transactions will not be picked up using a date range method. Users can also accidentally post transactions with dates that have already been reconciled and hence will not be included in the next VAT reconciliation. This is why we recommend always using a period range versus a date range when calculating VAT. You can read more about the pitfalls of submitting VAT using dates here.
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Digital Tax does not affect when you report to the HMRC, it just changes how you submit the information. Please follow your usual VAT reporting period dates, if you are not sure what those are, please consult the HMRC.
1. Go into System Defaults > Company Details tab. Make sure all your company details are accurate. Company No is your company registration number, not your VAT number.
2. Run your VAT Report manually like you normally would, to check everything is flagged correctly and the amounts are correct.
Check anything dated or posted to a period beyond the current VAT period is correct. Instructions for running a VAT Report are located here.
3. In Eclipse go to General Ledger > VAT Submission. The VAT Submission window will appear.
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4. Enter your VAT Registration Number in the VAT Rego field.
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5. Click the Check Obligation button. The HMRC portal window will appear within Eclipse. Scroll down in the window and click the Continue button. Enter your HMRC portal login information and click Sign In. Click Grant Authority. Your current VAT reporting period will be populated in the VAT Period field. Make sure this is correct before you continue. If it is not contact Eclipse support.
6. Enter in the Search range for the submission. You have a couple of different options for how to pull the transactions from the General Ledger:
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Use Reconcile: If you diligently reconcile your VAT account at the end of each submission, you can tick Use Reconcile. This method pulls all unreconciled items from the VAT accounts listed and ignores the Ledger Period and Ledger Date ranges. This method requires that you use ONE VAT account for the entire production. It will not work if you split your VAT accounts into quarterly or monthly accounts.
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7. Enter the VAT Accounts and their applicable VAT codes. For each VAT Code, list the TX Flag(s) in the first column and enter in the Account Code in the second column.
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VAT EC Acquisitions Code: Purchases made from EU suppliers (Zero-Rated EU). Enter the TX Flags and cost code where the VAT EC Acquisitions transactions have been coded.
VAT Due On Outputs: Sales to UK Suppliers (Accounts Receivable). Enter the TX Flags and Account Code where the transactions for have been coded.
VAT Reclaimed On Inputs: Purchases from UK Suppliers (Accounts Payable). Enter in the TX Flags and Account Code where the transactions for have been coded.
EC Supplies Code: Enter in the TX Flag for your EU sales (only applicable if you provide goods or services to another EU country).
8. You can tick Create CSV Report before clicking Calculate to generate a ledger output of the calculation to Excel.
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It must be entered as: GB01000800_01__001 ( _ represents space)
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9. Click the Calculate button to populate your VAT calculations. Check each total and make sure these are correct and that they match your VAT Report before you submit it to the HMRC Portal.
Note: If the Totals are incorrect, check the TX Flags on the transactions to make sure they have been entered correctly.
10. Tick the I Agree checkbox, then click the Submit button. The HMRC Portal window will appear again within Eclipse. Scroll down in the window and click the Continue button. Enter your HMRC portal login information and click Sign In. Click Grant Authority. This will complete your VAT submission and send it to the HMRC Portal.
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