What are the VAT Considerations for Opening Balances?
There are two ways of accounting for VAT: Standard VAT or VAT Cash Accounting.
When using the Standard VAT scheme, the VAT Return is calculated by using the tax on the invoices/credits you have raised for your customers or received from your suppliers. It also calculates the VAT Return based on the tax owed on any bank/cash payments or receipts or nominal ledger journals that have tax codes other than the non-vatable tax code (T9 by default).
Using the VAT Cash Accounting scheme, the VAT return is calculated by using the tax on the invoices/credits which you have received payment for from your customers or you have paid to your suppliers. It also calculates the VAT Return based on the tax owed on any bank/cash payments or receipts or nominal ledger journals which have tax codes other than the non-vatable tax code (T9 by default).
Related Topics
Your Opening Balances Checklist
Nominal Ledger Opening Balances
To Check your CustomersÆ and SuppliersÆ Opening Balances