How VAT is treated in Clear Books
On an invoice accounting VAT scheme, VAT on sales and purchases, credit or debit the VAT control account.
On a cash accounting VAT scheme, VAT on sales and purchases, credit or debit the VAT cash control account. Once payment is allocated, the system generates a journal which will Dr/Cr VAT cash control and Cr/Dr VAT control.
How to account for VAT payments in Clear Books
When you finalise an MTD VAT return in Clear Books, the system will generate a bill automatically coded to the VAT control account (or sales invoice if you are owed money).
How to create and submit an MTD VAT return You can then record payment against the bill or allocate payment from the bank explain menu.
How to record a payment against a bill
Bank Explain screen overview
If you have the VAT journals feature enabled, the system will generate a journal instead of an invoice. This journal will Dr/Cr VAT control Cr/Dr Vat payable (depending on whether you are owed money or owe money). Make sure to use the VAT payable account when explaining the payment.
How to use VAT return journals
If you are not using the VAT return feature in Clear Books but want to explain a payment to/from HMRC for VAT make sure to use the VAT control account.