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The Book-keepers Forum (UK) -> VAT, Payroll & Tax -> Vat Liability Accounts
Post Info TOPIC: Vat Liability Accounts
buckland10


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Vat Liability Accounts
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Hi, In February the company I work for made paid their VAT liability to HMRC for the 3 month period to end Jan 2010, also the end of their financial year.  This was calculated manually and they have since started using an accounts system.  They paid the liability in Feb so how do I account for that on the accounts system?  Do I assign an opening balance as at 1 Feb 2010 and then do a journal to credit bank and debit VAT liability for the date it was paid (17 Feb) or something else?

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Barkers


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If you have a list of opening balances for your accounts system, the VAT you owe to HMRC would be classed as a liability and needs bringing forward until you pay it. So therefore i would log it as an opening balance, and then when it is paid on 17th feb show the payment going out of the bank to the vat nominal.

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buckland10


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Sorry to show my inexperience but if it's a liability is it a positive or negative opening balance?

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RobH


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Once the accounts have been finalised, the accountant should give you a list of opening balances to journal into the new system, there should be a cr balance on VAT liability that hopefully matches up with the payment made. In the meantime you can enter thepayment on (as you say dr vat liability, cr bank) and once the o/bals are on it should clear the balance.

Rob

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Rob
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buckland10


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Brilliant thanks.

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