# VAT Return Question

Registered Posts: 283 Dedicated contributor 🦉
I am refreshing my memory of VAT returns, and have answered this question:

Sales Day Book
Oct-Dec Sales Net: £26,500.00 VAT: £4,637.50 Gross: £31,137.50

Sales Returns Day Book
Oct-Dec Credit Note Net: £300.00 VAT: £52.50 Gross: £352.50

Purchase Day Book
Oct-Dec Purchases on Credit Net: £8,750.00 VAT: £1,531.25 Gross: £10,281.25

Purchase Returns Day Book
Oct-Dec Credit Notes Net: £600.00 VAT: £105.00 Gross: £705.00

Invoice May 2007 - £940.00 (VAT Inclusive)
Invoice July 2007 - £352.50 (VAT Inclusive)

1. Write up the VAT Account as at 31 Dec 2007. The opening balance on 1st October 2007 had been £2850 (CR) and this has been settled by cheque on the 31st of October 2007.

VAT Account
2007 £ 2007 £
31 Oct Bank 2,850.00 _____ 01 Oct Balanc B/D 2,850.00
31 Dec PDB 1,531.25 _____ 31 Dec SDB 4,637.50
31 Dec SRDB 52.50 ______ 31 Dec PRDB 105.00
31 Dec Balance C/D 2,943.33 ______

7,592.50 _______ 7,592.50

________ 01 Jan Balance B/D 2,943.33

Hows this?

2. Prepare the VAT submission form.

Box 1:
Box 2: None
Box 3:
Box 4:
Box 5:
Box 6: £26,200.00
Box 7: £8,150.00
Box 8: None
Box 9: None

I am struggling on boxes 1/3/4/5

Thanks :thumbup1:
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• Registered Posts: 794 Epic contributor 🐘
I can't see how you've arrived at the VAT on bad debts figure. I suspect that the question was set at a VAT rate of 17.5% so the bad debts include VAT at 17.5%. When you've got a VAT inclusive figure you have to work backwards to get to the VAT, ie it's not 17.5% x gross (although this doesn't seem to be what you've done).
• Registered Posts: 283 Dedicated contributor 🦉
Oh dear, I made an error, the VAT on bad debts is meant to be £192.50

VAT Account

2007 £ ___________________ 2007 £
31 Oct Bank 2,850.00 ________ 01 Oct Balanc B/D 2,850.00
31 Dec PDB 1,531.25 ________ 31 Dec SDB 4,637.50
31 Dec SRDB 52.50 __________ 31 Dec PRDB 105.00
31 Dec Balance C/D 4,626.25
____________7,592.50 _________________ 7,592.50

__________________________ 01 Jan Balance B/D 4,626.25
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• Registered Posts: 283 Dedicated contributor 🦉
Would the VAT Return be:

Box 1: £4585.00
Box 2: NONE
Box 3: £4584.00
Box 4: £1426.25
Box 5: £3157.75
Box 6: £26,200.00
Box 7: £8,150.00
Box 8: None
Box 9: None
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• Registered Posts: 794 Epic contributor 🐘
Sammmy88 wrote: »
Oh dear, I made an error, the VAT on bad debts is meant to be £192.50

VAT Account

2007 £ ___________________ 2007 £
31 Oct Bank 2,850.00 ________ 01 Oct Balanc B/D 2,850.00
31 Dec PDB 1,531.25 ________ 31 Dec SDB 4,637.50
31 Dec SRDB 52.50 __________ 31 Dec PRDB 105.00
31 Dec Balance C/D 4,626.25
____________7,592.50 _________________ 7,592.50

__________________________ 01 Jan Balance B/D 4,626.25

Can you reclaim the VAT on the July bad debt? Doesn't it have to be more than 6 months old?
• Registered Posts: 283 Dedicated contributor 🦉
Yes you are right, I totally forgot about that! So the only bad debt claimable is in May which is £140.00

VAT Account

2007 £ ___________________ 2007 £
31 Oct Bank 2,850.00 ________ 01 Oct Balanc B/D 2,850.00
31 Dec PDB 1,531.25 ________ 31 Dec SDB 4,637.50
31 Dec SRDB 52.50 __________ 31 Dec PRDB 105.00
31 Dec Balance C/D 3,018.75
____________7,592.50 _________________ 7,592.50

__________________________ 01 Jan Balance B/D 3,018.75

Would then be the answer in the VAT return...
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• Registered Posts: 283 Dedicated contributor 🦉
So the VAT Return would be:

Box 1: £4,585.00
Box 2: NONE
Box 3: £4,584.00
Box 4: £1,286.25 - taking away the May bad debt
Box 5: £3,297.75
Box 6: £26,200.00
Box 7: £8,150.00
Box 8: None
Box 9: None
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