After completing the VAT Return, the reconciled values from the Sales and Purchase Tax Control Accounts must be transferred to the VAT Liability nominal code to show the value due to be paid to, or reclaimed from HMRC or Revenue.

On paying or receiving the VAT, a bank payment or receipt can then be posted to clear the VAT Liability nominal code.

Sage Accounts contains a VAT Transfer Wizard to guide you through transferring the VAT liability, however it can also be done manually. This article explains how to post the journals manually.

1. From the Value Added Tax Return window, make a note of the values from boxes 1, 2 and 4.
   
   The values must be recorded before any manual adjustments have been posted.
   
   

   To calculate the correct value for the journal, if there's a figure in box 2 this must be deducted from the figure in box 4.

2. Click Nominal Codes  then click Journal entry.
   
   
3. Post the following journal:
   
   

   We recommend using the date of last day of the VAT period, the journals are not then included in reports for the following VAT period.

   In this example, the figure in box 1 is 5000.00 and the figure from box 4 less box 2 is 3500:
   
   

   N/C	Name	T/C	Debit	Credit
   2200	Sales Tax Control Account	T9	5000.00	0.00
   2202	VAT Liability	T9	0.00	5000.00
   2201	Purchases Tax Control Account	T9	0.00	3500.00
   2202	VAT Liability	T9	3500.00	0.00

4. Click Save and click Close.

This journal is the same for both the Standard VAT scheme and the VAT Cash Accounting scheme.