Different VAT Account

Question asked by Lucie Cooper 8 years ago

Hello,

I am just in the middle of preparing some management accounts and VAT Return and was wondering if someone could help me distinguish between all the VAT accounts. The client is Flat rate cash accounting and on the balance sheet there is VAT Control with an amount (which matches the VAT return) and then an amount under VAT Cash control for an amount much smaller .

Could someone let me know what these relate to?

Thanks Lucie

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2 Replies

Hi Lucie

When using cash accounting, creating an invoice or a bill puts the VAT temporarily to the VAT cash control account. As and when the invoice or bill is paid off the system automatically then transfers the VAT to the VAT control account, ready for the next VAT return.

In theory therefore, once a VAT return is processed at the end of a quarter, the balance on the Cash control should be the VAT on unpaid invoices less the VAT on unpaid bills.

Best answer
8 years ago

Thanks Paul, makes sense now!

8 years ago

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