Forum Message

VAT Liability Account

If the business is owed VAT by HMRC it shows under the heading 'VAT Liability' in the Trial Balance but is correctly shown as a debit which is an asset. If possible the Trial Balance's label 'VAT Liability' could just be e.g. 'VAT' and this would do the job as a debit or credit entry would mean it was either an asset or a liability. Can this be done?

Also (and more importantly) the Balance Sheet shows it as a negative liability but it is actually a Current Asset. Can the VAT owed to the business be shown as a Current Asset in the Balance sheet?


Posted by Ian on Jun 19, 2009 8:36 PM BST

Hi Ian,

To change the account name, go to the Accounts list and double-click on the account.

Unfortunately you cannot change the classification of an account - the VAT Liability account will remain under 'Liabilities' in the balance sheet, even if it has a debit balance.

Regards,


Posted by Mark McLaren (Solar Accounts) on Jun 20, 2009 10:35 AM BST