input/output VAT

hannahh Registered Posts: 5 Regular contributor ⭐ 😼 ⭐
which is vat on sales and which is vat on purchases?

i can never seem to remember it as they could both be seen as input and output vat seeing as you either get the money in then have to pay it back out or the other way round

and how can i remember which is which?



  • Marg22
    Marg22 Registered Posts: 84 💫 🐯 💫
    output and input vat

    Hi Hannah

    I think about the invoices you send out and the one which you receive.

    Sales invoices you send out of your company to other companies, so they are output tax.

    Purchase invoices are received into your company, so they are input tax.

    Hope this helps.


  • agatha
    agatha Registered Posts: 41 💫 🐯 💫
    OUTPUT VAT- VAT on goods or services sold.

    DR Cash (or Debtors)
    CR Sales
    CR VAT Account

    INPUT VAT- VAT on goods or services purchased

    DR Purchases
    DR VAT Account
    CR Trade Creditors

    SSAP 5: Sales and purchases shown in the P&L EXLUDE VAT
    Each quarter the balance on VAT ACCOUNT (output VAT less input VAT) is calculated.
  • hangawi74
    hangawi74 Registered Posts: 19
    Is it wrong to say the vat input is a debtor? Because we collecting this money from hmrc?
  • Zowie
    Zowie Registered Posts: 2
    The best way I remembered which way round they are is


    Sales = Output Tax and Purchases = Input Tax
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    Input VAT is a debtor, i.e. recoverable from HMRC (normally by offsetting it against Output VAT which would be a creditor)
  • hangawi74
    hangawi74 Registered Posts: 19
    Is it that the Vat amount to be claimed by hmrc should be entered as a vat input as creditor as at that moment it’s to be paid then after claiming it will be entered as an adjustment on debtors side to reduce vat input creditors that’s my understanding!
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    Output VAT is charged on sales and is a creditor.
    Input VAT is suffered on purchases and is a debtor.
    At the end of the VAT quarter (or VAT month or VAT year) journal adjustments can be done to offset/reduce the output VAT creditor using the input VAT debtor.
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