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 record VAT payments


i. When you finalise an MTD VAT return in Clear Books, the system will generate a bill automatically coded to the VAT control account. 


How to create and submit an MTD VAT return


ii. If you confirm a legacy VAT return, the system will generate a bill automatically coded to the VAT control account.  


How to create a legacy VAT return


In either of these two cases, you can 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


In either of these two cases, 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. 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. 


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How to contact support within Clear Books


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