Omni – VAT Returns

1. VAT registration details are entered on the ‘Scheme Details’ screen, Tax tab. SSASs and SIPPs are not generally registered for VAT themselves – the registration is usually for one or more properties (based on rent and property related expenses).

Income

2. When income is received with a VAT element, the gross amount received is entered as a bank transaction.

3. The only income with VAT will usually be rent or the sale of a property.

4. The VAT amount is entered by clicking ‘Add Details’.

5. If rent is generated as an expected rent transaction then the VAT will automatically be generated.

6. When the rent is imported, the ‘Amount’ is the gross amount and the VAT is also shown on the Rent Payments screen.

7. Once imported the VAT amount can be amended in the Rent Payments screen (but not the gross amount).

8. The date that the VAT was paid by the scheme to HMRC can be stored on the Rent Payments screen.

Expenditure

9. The gross amount of expenditure is entered as a bank transaction.

10. The reclaimable VAT amount is entered by clicking ‘Add Details’.

11. If VAT is suffered and cannot be reclaimed (because the scheme is not registered for VAT or the expenses are not property related) then the VAT should not be added to Omni. It is only the VAT that can be reclaimed that should be recorded.

12. The VAT reportable tick box on the ‘Add Details’ screen, allows you to select which purchases are reported on the VAT return even if no VAT is reclaimable.

13. All expenses are posted to the ‘Other’ screen (menu option = ‘Investments, Other Income/Expend’). There is no need to import.

14. ‘Property purchase’ could include VAT.

Calculating VAT

15. If Omni has to calculate VAT (e.g. for expected rent transactions) it rounds the VAT down to the penny below. Some property managers round to the nearest penny and so they can charge an extra penny in VAT – there may be discrepancies in the data for this reason. If the total gross amount is amended then the VAT included should also be amended.

Paying or reclaiming VAT

16. When VAT is paid to HMRC each quarter/year (or reclaimed), the amount is entered as a bank transaction. It is simply entered as ‘VAT Payment’ or ‘VAT Refund’ with no other details. The bank transaction is generated when processing the VAT on the Investments, VAT screen. If the payment comes from an account other than the scheme’s Main bank account, that account can be selected on the VAT screen so that the expected transactions are generated in the correct account.

17. Transactions that have been accounted for in previous VAT returns are identified by the ‘Date VAT paid’ or ‘Date VAT reclaimed’ fields in the Rent Payments or Other Income/Expend screens. Again, Omni generates these dates when processing the VAT.

VAT returns

18. The calculations for VAT returns should not be prepared manually to comply with the need to process VAT digitally. The data should be entered to the dstabase and Omni will collate the data, dispaly the information for the VAT return and then submit it electronically to HMRC.

19. When producing the VAT returns, Omni takes into account:

a. The VAT element in each expenditure transaction (whether or not posted or imported)

b. The VAT element in rent and property sales

c. Which transactions were accounted for in previous returns and which were not.

20. The screen asks whether VAT will be accounted for annually or quarterly and based on this asks for a VAT return date (i.e. the end of the quarter to which the return relates) or the monthly amount, day of the month VAT is paid and the day and month of the end of the VAT year. Omni finds all records where the VAT date is blank or is after the VAT return date. The results are displayed in Excel and so the workings on the spreadsheet can be stored by the user.

21. The spreadsheet highlights any rent that has not been imported.

22. The ‘VAT %’ is calculated by dividing the VAT by the net amount. This provides a useful check – the result should be 20% (or slightly under if the VAT has been rounded down by 1p).

23. It also shows rent with no VAT stored and other income and expenditure with no VAT stored. If a scheme is registered for VAT then any rent stored without VAT could be an error. For other income and other expenditure, the details are shown so that the user can see whether or not VAT should have been included.

24. After the screen has produced the VAT return in Excel it allows the user to update all the records.

25. Updating records. If the results produced by Omni are accepted, then click the ‘Submit Return to HMRC’ button. Omni will electronically log on to HMRC’s VAT server using the ID and Password stored in the database. HMRC will notify you of the date that the VAT will be deducted from the scheme’s bank account and issue a receipt.

26. You then enter the VAT payment date supplied by HMRC into the Payment Date box and click ‘Process VAT return’. This stores the Payment Date as the ‘date VAT paid’ or ‘date VAT reclaimed’ with each transaction involved. It also creates the expected bank transaction for the VAT payment or the refund. All records must be imported for the update to be used – otherwise the button will be greyed out..

27. The Submission Date is the date that you complete the VAT return online. It is stored in the ‘Returns Submitted’ grid, see below.

28. If the VAT return is produced in Excel and it is found that changes need to be made to the data, the Omni database needs to be amended as necessary and then the VAT return has to be run again. Simply amending the spreadsheet will not amend the results – using Omni to ‘Process the VAT return’ after amending the spreadsheet would mean that Omni used the original incorrect data.

29. If you have processed the VAT return in Omni and then found there is an error, you can use the ‘Reverse VAT Return’ button. This should not be used when you have submitted the VAT return electronically to HMRC because you can’t amend a return once it has been submitted.

Non-reclaimable VAT

30. Sometimes VAT cannot be reclaimed e.g. on stockbroker fees or our fees for advice on non-property issues.

31. It is important to emphasise that any non-reclaimable VAT should not be entered to Omni i.e. in Omni, ‘VAT’ means ‘reclaimable VAT’.

Reporting Turnover in Boxes 6 and 7

32. The total of sales excluding VAT has to be included in Box 6. Similarly total purchases in Box 7. Amounts that had VAT attached are automatically included in those boxes. If you want amounts to be included for transactions where no VAT was due, the VAT reportable field for that transaction can be ticked.

33. It is best to store the correct information at the transaction level but sometimes as a last resort you may feel you need to adjust the Box 6 or Box 7 totals. If so, you can use the ‘Boxes 6 and 7’ button to store the adjustments needed. When amounts have been entered a grid will be shown on the VAT screen and these details will be allowed for when collating the data for the VAT return.

Debtors and creditors

34. Omni includes accrued VAT in creditors automatically (as if it was due on the valuation date).

35. If rent is due but not received, Omni includes the net amount of rent (excluding the VAT element) as a debtor.

36. If VAT is due on a fee or other expense, Omni includes the net amount (excluding the VAT element) as a creditor.

Cash Accounting

37. Omni produces the VAT return on a cash accounting and not an accruals basis.

38. Cash accounting relates to the date that the payment was ‘made’.

39. It is therefore important that expenditure is entered into Omni with the date that the cheque was written and not the date that the cheque was cashed. If the wrong date is used then the payment can be included in a later VAT period than it should.

Online Login Details

40. You should store the User ID and Password needed to connect to HMRC’s server for submitting VAT details electronically.

41. The ‘Direct Debit setup?’ field allows you to store whether there is a debit debit for HMRC.

Returns Submitted

42. Details of the returns that have been submitted cannot be stored manually because the HMRC’s digital approach to VAT requires that the data comes from a computer based system without manual intervention. When you click the ‘Process VAT Return button’ then the data will be entered automatically, including the values entered in the 9 boxes and the Payment Date. This data will be sent electronically to HMRC.

XL Reports

43. There are reports which show all schemes registered for VAT and also the VAT not paid or reclaimed, across all schemes – Tax reports.