The VAT control account: what do you owe HMRC?
All the VAT from the day books and the cash book meets in one account. Build it for a quarter and find the balance owed to HMRC.
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 1What goes on each side2 questions
The VAT control account gathers every VAT figure in the books. Its balance is what the business owes HMRC, or what HMRC owes the business.
| Debit side | Credit side |
|---|---|
| Input tax from the purchases day book | Output tax from the sales day book |
| Input tax on cash purchases, from the cash book | Output tax on cash sales, from the cash book |
| VAT from the sales returns day book | VAT from the purchases returns day book |
| Payments to HMRC | Refunds from HMRC |
Everything on the debit side reduces what is owed to HMRC. Everything on the credit side increases it.
Task 2A quarter in the account4 questions
Task 3Reading the balance4 questions