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Declaring exempt sales on VAT return

Should they be showing their (sales) in VAT return even though sales are exempt ?

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VAT registered business is not showing their (sales) supplies in VAT return because they are exempt for their supplies.
Someone has left and I have been asked to check the various business processes. I am not happy with the VAT records.

Of course I don't do VAT and their accountant doesn't check anything.

I 'thought' that all (sales) supplies should be included in Box6 net of VAT. [with the exception of certain items MOT etc]. Perhaps they are correct since their sales are exempt.

Box3 & Box6 always show Zero.

They have Input VAT every month. [the only reason to be registered] Box5 is always a reclaim.
I have checked the totals and Box7 cannot be correct as they are only showing purchases they are claiming VAT back on.

The amount of monies reclaimed is okay. Just the figures being supplied need to be amended.

HMRC advice: "read 700/12 section3.7"

'Box 6 total value of sales and all other outputs excluding any VAT

Show the total value of all your business sales and other specific outputs but leave out any VAT. Some examples are:

zero rate, reduced rate and exempt supplies'

Tell me I am incorrect? Box6 & Box 7 should include all sales & purchases? 

Replies (3)

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paddle steamer
11th Jun 2019 14:59

I certainly include exempt sales in box 6 but on the "purchases" side things like wages (items that are not supplies) are omitted from box 7, as detailed in note 3.8.

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By Wanderer
11th Jun 2019 16:19

So only make exempt supplies but they are claiming back input tax?

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My photo
By Matrix
11th Jun 2019 16:42

What taxable supplies is the business making to be registered for VAT? It sounds like you may need to start there.

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