Hi I am trying to prepare figures for a VAT Return to 31st December 2013 and the automatically generated figure for the net VAT to be paid does not match the figure against 31st December 2013 in the VAT Liability Account. Can you suggest why this might be the case please and possible solutions to correct any errors as I am not sure which figure to pay HMRC! Many thanks.
Hi Amanda,
You may have entered 'VAT Liability' in one of the transaction windows. For example, if you create a General Transaction from the VAT Liability account, it will increase the balance of the account but will not affect the Box 5 figure (because Solar Accounts treats General Transactions as 'Out of Scope').
Also, if you use the 'cash method' for calculating your VAT return figures there may be unpaid invoices at the end of the VAT period. These invoices will affect the VAT Liability account but not the VAT return figures (because they have not yet been paid).
To reconcile the VAT Liability account with the VAT return Box 5 figure, you need to go through each transaction listed in the VAT Return Detail report and compare it to the VAT Liability account activity. You may find it beneficial to ask your accountant to do this.
Regards
