Date Based Accounting – VAT Considerations

Date based accounting is not the norm in Prelude Desktop Accounts but Prelude Desktop can be configured to cope with this.

Effectively there is one period per year – you have to have a year-end in order to transfer your profit or loss to reserves and reduce the profit and loss balances to nil.

You can still produce accounts whenever throughout the year by simply putting in a date up to when you want the reported figures. As there are no period ends late invoices and transactions will affect balances and reports to a certain date can be different if run subsequently.

The main issue with Date based accounting is the VAT return. Once a return has been run the figures accumulate to the next one – it is important to ensure the transactions are reconciled and flagged as being included so the transactions are not included twice. Quarterly VAT Returns cannot be submitted to HMRC using Date Based Accounting – only annual submissions. If you are not MTD registered this is not an issue.

All companies to be in SL/PL/NL period 1
Transactions dated before the current year-end date will be posted to NL period 1
Transactions dated after the current year-end date will be posted to NL period 2
All transactions will be posted to VAT period 1