VAT help.

valentino46
valentino46 Registered Posts: 124 Dedicated contributor 🦉
hi guys,

whn filling in a vat control account with figures given, would a the vat on a bad debt written off in the current vat quarter be reclaimed and shown as a credit entry in the vat account as it is the equivalent of a credit note entry??

bit unsure of how to deal with this.

thanks guys

rob

Comments

  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
    Before the VAT can be claimed back for a bad debt the following must have happened
    1) The out-put vat tax must have been paid to HMRC
    2) The sales invoice must be at least 6 months old
    3) The bad debt has been written off

    When you write off the band debt; original sales entries must be reversed.

    SLCA (Credit)
    Sales (Debit)
    VAT (Debit)

    From the above it is clear that the VAT Control account MUST be DEBITED when a bad debt is written off
  • valentino46
    valentino46 Registered Posts: 124 Dedicated contributor 🦉
    postings

    ok,

    thanks.

    so in reason the vat becomes a form of input tax as we need to reclaim it?
  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
    Although in the control account the VAT appears on the Debit side,

    BUT when file the VAT RETURN (Vat Form)

    The Input vat (debits) are not increased; instead

    The OUTPUT vat (Credits) are reduced.

    The Net Effect of VAT payable will not change
  • valentino46
    valentino46 Registered Posts: 124 Dedicated contributor 🦉
    thanks for help
Privacy Policy