VAT Liability Discrepancy

I have a balance on my VAT liability at the end of the VAT period. However the VAT return for the same end date shows £1071.16 less.
How is this possible and how can I find out what is wrong.

Thanks

Posted by John Russell on Jul 3, 2020 12:20 PM BST

Hello John,

There can be a number of reasons why the VAT Liability balance doesn't
match the Box 5 figure on your VAT return:

1. If you use the cash method (ie. you account for VAT when money changes
   hands, not when invoices are issued) then any unpaid invoices will affect
   the VAT Liability account but not the VAT return

2. You may have recorded a General Transaction where you adjust the VAT
   Liability balance - this transaction will not appear on the VAT return.

3. You may have made a change to a transaction in the VAT period after you
   submitted the VAT return

Unfortunately Solar Accounts doesn't have a simple way to identify which
transaction is causing the discrepancy. You will need to go through each
transaction listed in the Account Activity for the VAT Liability account,
then compare it with the associated figure in the VAT Period Detail report.

Also note that the discrepancy may have arisen in a previous VAT period,
not the period you are looking at - you should check if the same
discrepancy appears at the end of the previous VAT return period.

Posted by Solar Accounts Customer Support on Jul 3, 2020 3:34 PM BST