VAT & Bank Interest
Hi,
My client is currently registered for the flat rate VAT scheme and he recently made a cash deposit to a high interest (ha ha) account to make the most of his cash reserves. He receives the interest monthly and now when i try and file a VAT return using EasyBooks it includes this bank interest which is actually exempt. Is there a way around this?
I've coded the bank interest to an 'other income' account.
Any help much appreciated
James
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Support Staff 1 Posted by Admin on 14 May, 2014 06:00 PM
Hi James,
Ha ha indeed. I know what you mean. I was pleasantly surprised to get £7 from HMRC last year as interest for paying before 31 December. They pay 0.5% interest, which is better than my bank.
Anyway, here's how to deal with your problem. If you've made a new account for interest, you might prefer to set the category more like Investment income but either will do. Open the account details and you'll see a switch called VAT Exempt. Turn that on and it won't take any transactions into account that link to it.
Mathew
Admin closed this discussion on 31 May, 2014 07:47 AM.