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VAT Refund

Journal to recognise refund received in previous financial year

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I've recently started keeping the books for a small school which claims VAT refunds using the VAT126 form. So far, so simple.

Usually, when a refund is received it is credited to "VAT Control", then a journal is entered to transfer the bank payment to "VAT HMRC Control Account". However, I've spotting that for a refund of circa £7k received in the last financial year (Sept 2016-Aug 2017) no journal was entered and as a result the VAT HMRC control account is incorrect.  I can enter a journal to reduce the refunds to be claimed from HMRC (credit VAT HMRC control account) but not clear which account to debit? 

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By dejaneiro2005
08th Jun 2018 11:43

DR Bank

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By johngroganjga
08th Jun 2018 11:48

Where is the recovered VAT sitting in the books now? That is (obviously) where to credit the refund to.

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By deborahcb
08th Jun 2018 12:53

Thank you both

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By TheAccountant-ish
15th Jun 2018 16:31

Dr Bank
Cr VAT Liability

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By TheAccountant-ish
15th Jun 2018 16:30

Dr Bank
Cr VAT Liability

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