Value Added Tax Return(VAT100)

A UK VAT registered trader must keep a record of its sales and purchases, and the amount of VAT it has charged and can reclaim. These figures should be extracted for the period covered by the return. For most businesses, the VAT return can be completed by transcribing the figures into the VAT return as follows:

Box 1 and 3 VAT on sales
Box 4 VAT on purchases which is allowable input tax
Box 5 Box 3 less Box 4 - gives payment or repayment due
Box 6 Sales, net of VAT
Box 7 Purchases, net of VAT

If transactions have taken place within the EC, these also have to be put on the return, in boxes 2, 8 and 9 as appropriate.

Liberty Accounts strongly recommend that if you are new to or unfamiliar with VAT you consult with your advisor before completing your return.

The report can be run at any time, but it is only after a VAT period end date has passed that the opportunity to accept (and therefore close the VAT period) will be available.

After the period end date the report will invite you to ACCEPT the report. The form will be populated with the data that system has available. In most cases this will be correct. However if adjustments are necessary, make them in the second column as a positive or negative incremental change; a record of the amendment is then retained for when the report is printed out again in the future.

Accepting the VAT100 means that the system rolls over to the next VAT accounting period, and all the transactions included in the report are flagged as VAT reconciled.

Finally the amount of the VAT due to or from HMRC for the relevant VAT period is moved from the VAT Control Account to the VAT Liability Account.

Liberty Accounts Online VAT Filing

Liberty Accounts supports online filing of VAT declarations, both VAT100 and VAT101(EC Sales List).

To use online VAT filing simply:

Credentials are entered and stored via the HMRC menu

HMRC - Credentials

The credentials stored by a user for a business will only be used for submissions for that user/business. The password is stored using a one way encryption technique to protect your security.

See more details for correctly configuring VAT for the organisation on the system from VAT Configuration

Making a VAT Partial Exemption Adjustment

If your business is registered for VAT and makes exempt supplies, an adjustment may be necessary to reduce the amount of input tax that can be recovered. We recommend that you consult with HMRC or your advisor before making any adjustments. To record the exempt input tax, use a journal entry to make the adjustment.

Control - Add Journal

See VAT - Partial Exemption Adjustment for more information.

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