Journal entries move values between ledger accounts. By default, they don’t affect your VAT Return.
Selecting Include on VAT Return when you add a journal, updates your VAT Return based on the ledger account.
The following table shows which VAT Return box updates when you enter a journal.
| Ledger Account | Default Nominal Code | Credit or Debit | Affects the VAT Return |
| VAT on sales | 2200 | Credit | Increases Box 1 |
| VAT on sales | 2200 | Debit | Decreases Box 1 |
| VAT on purchases | 2201 | Credit | Decreases Box 4 |
| VAT on purchases | 2201 | Debit | Increases Box 4 |
| Any income account | 4000 to 4940 | Credit | Increases Box 6 |
| Any income account | 4000 to 4940 | Debit | Decreases Box 6 |
| Any expenditure account | 5000 to 9999 | Credit | Decreases Box 7 |
| Any expenditure account | 5000 to 9999 | Debit | Increases Box 7 |
| Any other ledger account | Credit | Increases Box 6 | |
| Any other ledger account | Debit | Increases Box 7 |
If you use the Flat Rate VAT scheme, journals: