Net VAT: pay or reclaim
Box 5 is the difference between the VAT due and the VAT reclaimed. Work it out, see who pays whom, and post the payment.
This path is practice in how the records and the sums work. It is not tax advice. Any rate or allowance in a question is an example for that question, so check GOV.UK for the current figures.
Task 1Box 5 is the difference2 questions
Box 5 is the difference between box 3, the total VAT due, and box 4, the VAT reclaimed.
- Box 3 is bigger: the business pays the difference to HMRC
- Box 4 is bigger: HMRC repays the difference to the business
For the quarter ended 31 March, Fernley Cycles has £10,184 in box 3 and £5,442 in box 4.
Task 2When HMRC owes the business3 questions
Task 3Paying HMRC3 questions