VAT Control Account

Actually Helen, in this case it is not necessary, sorry I was thinking too of something else. Once you have clicked confirm at the bottom of the VAT return it will create a bill which you need to allocate. The Steps Andy lays out > Creating a Bill and then allocating this against an account is what you have to do. I was just thinking that you had to make sure all your bank details were on the system and that the account you were allocating too was fully updated.

We have a direct debit set up with HMRC and so when this was paid from our account credit was to current account and debit VAT cash control. What am I looking for on the bank account setup?

Hi Helen, You could also check to see how your bank accounts are set up in Clear Books in Money > Bank Accounts > All. And then check Payment Methods to see what you have set up.

Yes but when you paid from Bank account you must have selected an account to record the payment against? (Double Entry Accounting).

No from bank account

That would work provided you have paid HMRC from your Cash Control Account.

OK I think you've hit on the answer here. VAT returns are prepared on CB but not submitted, I manually type in via Government Gateway, a bill is not generated but when the payment comes through the bank rec it is journalled off, so I guess the following journal would sort the problem:

DR VAT Control CR VAT Cash Control

Thanks for the replies, however the VAT no on our dashboard does not fluctuate, it just goes up

Hi Helen, Andy is spot on with his first option. That is what we would recommend also.

It does as you describe for me. The VAT Liability goes up and down as we enter sales and bills then it goes down again when we do a VAT return.

One thing I have noticed is that the Dashboard does appear to have a bit of caching in place and sometimes it can take a few hours to reflect changes.

Thanks and yes that's what I thought and using the first methodology described above, so why does the VAT liability build up on the dashboard as the VAT returns are paid and not build through the quarter with a reduction at the end?

It depends on how you manage it. If you use Clearbooks to prepare your VAT return then it will create a Bill to HMRC for the VAT Due against the VAT control Account

Which looks like

Cr Trade Creditors Dr VAT Control

Then you just pay the bill when you pay HMRC. It is the simplest method. Alternatively you could create a VAT Payable account and do

Cr VAT Payable Dr VAT Control

Then when you pay it

Cr Bank Account Dr VAT Payable