New features to help you manage clients’ VAT returns in FreeAgent

For VAT-registered small business owners, claiming VAT back from pre-registration purchases and back-dating transactions can be a real headache, and these clients will often turn to their accountant for guidance. To make it easier for you to support your clients with their VAT woes, we’ve made some helpful changes in FreeAgent.

Pre-registration costs drop-down menu

When you register a client for VAT, you have the option to claim the input VAT they paid on certain pre-registration costs for up to four years. With this in mind, we’ve added a new drop-down menu - 'Include pre-registration purchases' - to the form you use to set your clients up for VAT in FreeAgent.

Using this drop-down menu will allow you to claim the input for assets and stock that your client has bought (and still owns) within four years of their registration date. It allows you to do the same for services that a client’s business was billed for within the last six months.

We’ll maintain the existing three-year pre-registration period for any clients with previously filed returns. To find out more about this drop-down and how to claim pre-registration VAT back on behalf of clients, check out our handy Knowledge Base article.

New ‘out of scope’ VAT rate option

We’re starting to roll out a new 'out of scope’ VAT rate option from today, so you’ll see this appearing in your clients’ accounts in the coming days. This rate can be used for certain goods and services that your clients may buy or sell that are considered to be outside the scope of the UK VAT system.

This new VAT rate option is not only useful when applying a rate to any new out of scope transactions; it’s also a great way to enter back-dated transactions from previous locked periods. This applies to any transactions that haven’t been entered in FreeAgent, such as those from VAT returns you or your clients submitted outside of FreeAgent prior to the introduction of MTD.

The final piece of good news is that your clients will be able to use this ‘out of scope VAT option’ on desktop and on mobile! They’ll see this option appear in the FreeAgent mobile app in the coming days.

If you have any questions about these features contact our Practice Support team on practicesupport@freeagent.com.