Whenever a VAT Return is due you have to print a VAT Report. The report is used both as a transaction document for the ledger and as the basis for payment.

The report summarises the Input and Output VAT Accounts for the specified period, and also shows the total Inputs (purchases) and Outputs (sales). A positive total indicates that you are liable for VAT, a negative one signifies that you are owed money by the VAT authority.

Once a VAT Return has been printed for a given period, it is recommended that you enter a Transaction in the Transaction register transferring the VAT amount payable/receivable into the VAT Payments Account (835 in the Chart of Accounts supplied with FirstOffice). This Transaction would debit the VAT Outputs Payable Account (830) and credit the VAT Inputs Receivable Account (831), with a balancing posting to the VAT Payments Account. This Transaction must be entered within the period it concerns, preferably as the last Transaction of the period. The amount payable/receivable can then be transferred to your bank account with a further Transaction when payment is made/received.

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