Share this content

VAT on Purchase Invoices > 6mths overdue

VAT on Purchase Invoices > 6mths overdue

The unpaid invoices (will be paid later) to the supplier - On the VAT Return does the client enter a credit note for the VAT element already claimed, so that it is deducted off the VAT Return 03-12.  Is anything needed in the turnover box.   And then when the client does pay the invoice, he will enter an invoice for the VAT element only?  It is also his Yr End 31 March 2012 so creditors/accruals need to reflect the VAT. What book-keeping entries required please.


Please login or register to join the discussion.

By slarti
12th May 2012 14:09

You raise the invoice, you pay the VAT, unless ...

... you do cash accounting, has always been my understanding.

Which does hurt when you end up lending money to the Government, but at least when they do pay you don't have to give any more to the VAT.


Cash accounting is only available for smaller businesses, not sure of the size, and I think that you have to register the fact that this is what you are doing. If you are doing cash accounting, any unpaid purchase or sales invoices are totally excluded from the return.



Thanks (0)
By alattax
12th May 2012 15:41

Yes, VAT input tax on supplies > 6 months overdue should be repaid on the VAT return.

Turnover is not affected as it is an adjustment to the inputs figure.

If you are at your year end and you know the invoice is going to be paid in the future ( and therefore input VAT will be reclaimed) you really need to leave the expense in the P&L (or fixed asset purchase) as a net figure. So the corresponding debit should be to a separate balance sheet account for clarity, which will be released as input VAT to the VAT account when the invoice is paid.

I would reflect this as a journal between the two balance sheet accounts but it depends on your software whether this will get correctly into your VAT return.  



Thanks (0)
Share this content