VAT Accounting- The VAT Return –Timing & Filing

August 11th, 2007 Comments off
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Timing Of Filing Of VAT Return
Once a business is registered for VAT, the interval at which returns are to be made is decided between the trader and the Customs and Exisce.The usual period are:

  • Monthly or
  • Quarterly

Two factors to consider whether monthly or quarterly:

  • Convenient to file every quarterly instead of monthly
  • If the business is such that repayment of tax by the Customs and Excise is the norm, then it may be preferable to make declaration and receive these payments monthly.

 

Steps In The Filing Of VAT Returns:-
a.At the end of each period a certain amount of tax has been charged out to customers as part of the sale prices of the business’s goods or services – Output taxb.In the same period, tax has been charged by suppliers in addition to the purchase price of materials, goods and services. This tax can in most cases be reclaimed and is known as the – Input tax

c.If the tax received on sales or output tax is greater than the tax paid on purchases, then the business must pay the balance.

d.If the reverse is true then there is money owing to the business and the balance may be claimed from the Customs and Excise

Situation No 1: Filing Of VAT Return $
Output tax ( VAT charged on sales) 5,000
Less
Input tax ( VAT paid on purchases) 4,000
Amount payable to Customs & Excise 1,000

 

Situation No 2: Filing Of VAT Return $
Output tax ( VAT charged on sales) 4,000
Less
Input tax ( VAT paid on purchases) 5,000
Amount to claim from Customs & Excise 1,000

 

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Financial Accounting

 
 

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