Solution Properties
Solution ID:
200427112208991
Last Modified Date:
Tue Mar 04 16:58:51 UTC 2025
Taxonomy Path:
Case category//How do I...//processing
Author:
[email protected]
Post journals to affect your VAT Return - UK only
Description

When you post transactions like invoices, payments and credits, the tax code you use affects the VAT Return. You can also adjust the VAT Return by posting journals, if your accountant advises to do this. The impact of the journals on the VAT Return depends on the nominal code and tax codes you use.

When adjusting the VAT Return, you can't reduce values in a box. You have to increase the values in the opposite box. For example, to decrease the value in Box 1, increase the value in Box 4

The VAT Return includes an Adjustments option as an alternative to posting journals.

TIP: See our post a nominal journal article for more information.

Cause
Resolution

To post a journal

  1. Go to Nominal codes then click Journal entry.
  2. Enter your journals using the table below to post to the correct boxes on the VAT Return.

The default nominal codes are 2200 for the Sales Tax Control account and 2201 for the Purchase Tax Control account.

Box to affect Journal Credit/Debit Nominal code Tax code
Box 1 Journal Credit Sales Tax (2200) or Purchase Tax (2201). T1
  Post the other side of the journal to the nominal code affected by the net amount.
Box 4 Journal Debit Sales Tax (2200) or Purchase Tax (2201). T1
  Post the other side of the journal to the nominal code affected by the net amount.
Box 6 Journal Credit Any nominal code other than the Sales Tax (2200) or Purchase Tax (2201). T0, T1, or T2.
Box 7 Journal Debit Any nominal code other than the Sales Tax (2200) or Purchase Tax (2201). T0, T1, or T2.
Box 8 Journal Credit Any nominal code other than the Sales Tax (2200) or Purchase Tax (2201). T4
Box 9 Journal Debit Any nominal code other than the Sales Tax (2200) or Purchase Tax (2201). T7 or T8.
  1. Click Save.

Use a T9 tax code to avoid affecting the VAT Return.

▼ View examples

Sales example

For a £/€1,200.00 sale that includes £/€200.00 VAT, post the following journal:

N/C Name Details T/C Debit Credit
4000 Sales nominal code Net Sales T1 0.00 1000.00
2200 Sales Tax Control Account VAT T1 0.00 200.00
1200 Bank current account Bank T9 1200.00 0.00

This affects boxes 1 and 6 on your VAT Return:

  • Box 1 - 200.00
  • Box 6 - 1000.00

Boxes 3 and 5 also depend on the value in box 1 for their calculations.

Purchase example

For a £/€600.00 purchase that includes £/€100.00 VAT, post the following journal:

N/C Name Details T/C Debit Credit
5000 Purchase nominal code Net Purchases T1 500.00 0.00
2201 Purchase Tax Control Account VAT T1 100.00 0.00
1200 Bank current account Bank T9 0.00 600.00

This affects boxes 4 and 7 on your VAT Return:

  • Box 4 - 100.00
  • Box 7 - 500.00

Box 5 also depends on the value in box 4 for its calculation.

 

 

[BCB:19:UK - Sales message :ECB]
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