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VAT Threshold Monitoring and entering Input VAT when not VAT registered

I can see from other Canvass ideas that Kashflow monitors your turnover and gives a warning when you exceed the VAT registration threshold  (although I could not see that the help files mention this or how it works).

I have two concerns over this:

a) Whilst reports allow me to monitor my total annual turnover, there are various bits of turnover which do not count towards the VAT registration threshold.  There seems to be no way to differentiate between these.  I am no VAT expert, but these appear to be (mainly):

  • Sales outside of the EU
  • Sales to Business Customers within the EU
  • Any income from financial services or selling insurance
  • Any rental income from properties or the sale of land or existing buildings
  • Betting, gaming or lotteries

There is also the issue of purchases (eg Google advertising and Google Translate) which are not charged VAT at source, and need to be added to your turnover for working out the VAT registration threshold.

b) What is the best method of entering purchases whilst I am not VAT registered in order to keep track of the VAT paid on those invoices, in case I do exceed the registration threshold and therefore want to claim input VAT on stock in hand and services (eg where I have made a one off payment for 2 years web hosting)? 

I tried entering it as input VAT, but then that does not appear in my profit & loss account  (presumably because I am not VAT registered). 

Simply entering the price of goods purchased as the invoiced price + 20% VAT (say) does not work properly because of rounding etc which meand the invoices on Kashflow need an adjustment to match the actual invoice received.

  • Rich Mellor
  • Feb 15 2018
  • Acknowledged
  • Attach files
  • Rich Mellor commented
    6 Apr, 2019 06:50pm

    I am now very close to the VAT registration threshold and with Brexit, voluntary registration will probably be essential for many small businesses who currently sell into Europe (ie to allow them to reduce their prices to offset the local VAT and customs charges which their customers will face). 

    From 2020, VATMOSS is also being extended to physical goods sold cross-border to any EU country.

    It is therefore essential to be able to keep a close eye on the VAT registration threshold and how much VAT has been paid on my existing stock (as well as VAT paid in the previous X months).

    However, there is no system at all in Kashflow to enter input VAT - this was acknowledged over a year ago, and yet there is still no change.

    Will anything ever be implemented?