Mixed VAT and non-VAT sales

[Geordie613]

As I have previously mentioned, I have a client whose shop sells children's shoes. As such the vast majority of his sales are T0 (zero rated), but he does occasionally sell shoes that attract VAT.

For the previous quarter he has sent me this note: "VATable sales included in bank and cash sales £928". This means that out of all the sales I have entered for this quarter in nominal code 4000, whether from credit card transactions, cash or cheques, £928 (gross) was spent on 'non-zero-rated sales' of shoes.

What I propose to do, is use nominal code 4001 for VATable sales. Then create a journal, to debit £928 out of 4000 and credit 4001 for 773.33 for the VATable sales with a tax code of T1 which should create a VAT of 154.67. The problem is that the actual tax amount doesn't get added to the journal automatically as I imagined it would, so would have to be posted as an additional line on the journal. Is this correct? (apologies for the layout, but my web design skills are not great)
N/C* Name T/C* Debit Credit
4000 Sales (Zero rated) T0 928.00 0.00
4001 Sales (20% VAT) T1 0.00 773.33
2200 Sales Tax Control Account T1 0.00 154.67

Is this the way to do it? Is there a better way to deal with mixed sales, bearing in mind that I am only informed after the fact?

Thank you.

[brucedenney]

Post a bank payment of £928 T0 on 4000
Post a bank receipt of £928 T1 - use the calculate net button (F9) to reverse calculate the VAt on it.



In a retail environment what I would do is to set up a bank accounts as "the till" and "the credit card machine"

Post each periods cash sales into the till (from the z totals)
so would do
£12,345 T0 4000
£928 T1 4001 (reverse calc vat)

Post each periods card takings in the same way

Do transfers from the till to the bank as money is banked. The till balance should reflect what is actually in the till.
Do transfers from the card provider to the bank as the money is transferred, the Card account balance should represent the money "in transit" through the machine.

[Geordie613]

Thank you very much.