How to correct VAT only payroll invoices.

Lets say you pay a cast member 1000 for a wardrobe call who provides a VAT invoice at a latter date.

As you will only pay the VAT on receipt of an invoice you pay the 1000 to the agent and tag the lines as out of scope (Z or T9 tax flags etc).

When you get the invoice you tag the 200 VAT as tax code V or T1.

When you run your VAT report your VAT is 200 but your gross is 0.

The only way to fix this is to create an adjusting journal.

First change the tax code on the 200 VAT only amount to Z or T9 to exclude from the VAT report.

Add the following journal. You will notice the amounts are debit and credits to the same account and only difference is the Tax codes. It’s really important to make sure all the lines below have the same tran#

0800 VAT VAT Only Invoice Adj T9 -200

0800 VAT VAT Only Invoice Adj T1 200

11G Cast Fees VAT Only Invoice Adj T9 -1000

11G Cast Fees VAT Only Invoice Adj T1 1000