How to work out box 1 and box 4
Box 1 is the VAT on sales and box 4 is the VAT reclaimed on purchases. Work both out from the day books and the cash book.
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 1: VAT due on sales3 questions
Box 1 is the output tax for the period. Under standard VAT accounting it is the VAT on every sale made in the period, whether the customer has paid yet or not.
A credit note sent to a customer takes VAT back out of box 1.
| From the books | VAT |
|---|---|
| Sales day book: invoices to credit customers | 8,460.00 |
| Cash book: cash and card sales | 1,936.00 |
| Sales returns day book: credit notes to customers | 212.00 |
Task 2Box 4: VAT reclaimed on purchases5 questions