VAT Journals are used to enter Nominal Ledger Transactions that are to appear on the VAT Return, (as distinct from normal Journals that will not show, even if they reference a VAT Nominal Account).

You are able to assign a Journal Type to Standard Journals, VAT Journals, Recurring Journals, New, and Batched Journals, as required.

The entry of VAT Journals is very similar to the entry of all other Transactions, the minor differences are described below.

You can choose between posting Credits or Debits. Both transaction types operate in an identical manner.

Credit VAT Journals would typically be used by someone who does not use the Sales ledger to record Transactions (perhaps a small shop), but needs to account for VAT on takings.

Note: It is important to note that if you post a Debit VAT Journal incorrectly, you would correct it by posting a negative value Debit VAT Journal, and NOT a Credit VAT Journal, (and vice versa).

Depending on whether the Working Periods feature is enabled and on your Security Profile permissions, it may be possible for you to continue to post financial changes, for month end procedures, even after the posting period has been advanced; in this situation the Period becomes a drop-down and you can select the appropriate period.

The System prompts for more information than is required on the standard Journal Header window :

By default, both the Default Bank Account and the VAT Control Account will have been entered for you, based on the entries in Nominal Ledger Options - Default Accounts and Bank Default. You can click on the buttons for either field, and display a pop up list of Accounts available, or overwrite the default entries.

Note: Batched Cash Book Payments/ Receipts and NL VAT Journals are not taken into the +Batched column. This is because the Bank Account is the contra account and detail lines are not created until the journal is posted. If you need Cash Book Receipts/ Payments and NL VAT Journals to show, you must Post them.

Note: if you are using the Advanced Nominal Ledger to create your own chart of accounts using segmented or cost centre coding then you can click on the buttons to select the Categories that identify the Nominal account that is to be updated.

Currency will initially be set to the Home Currency, but if you have selected a foreign Currency Nominal account, clicking on will display a list of Currencies and Exchange Rates. If you select a Currency, additional information will be displayed. This will show the current Exchange Rate, but you can override this if you wish.

GB VAT This enables you to select the VAT status of the Transaction. If you select EU State, the EC Info button will become active, and if clicked, a window is displayed to allow entry or selection of the EC SSD Transaction Codes.

VAT Journal lines are set up as either Debit or Credit based on your selection when opening the VAT Journal windows. The Credit/Debit button displays the selection you made; however, the button itself is disabled.

The Date and Ref. fields for each Journal line are always suggested by the System to be the same as those entered on the Voucher Header. They can be changed for each Journal by clicking and over-writing them.

Each Voucher may have many Journal Detail lines, tabbing from the Detail field transfers the current Journal Detail line onto the Totals window, and clears the Detail window ready for the next Journal line.

Also see the Partial Exemption VAT overview and VAT Rate record topics.

The VAT Code recorded on the selected Analysis code will normally be displayed in the VAT field, however, there are some exceptions based on VAT Registration number and Tax Representative values. Clicking the search button displays a list of VAT Codes from which you can select the code you require.

If not using Fully recoverable VAT, the VAT Value displayed on the Detail line is the entire VAT value. The Nominal Update Account specified on the VAT Rate is updated with the Non-recoverable VAT Value and, if none is specified, then the Debit Update Account from the Analysis record is used. The VAT Value posted to the VAT Control Account is the VAT less the non-Recoverable element.

If a VAT Rate that is flagged as Partially Recoverable is selected and there is no effective Recovery Rate for the transaction date then you are cautioned that you have selected a VAT Rate that is flagged for partial recovery and no valid recovery rate has been specified, and the VAT is calculated as if the VAT Rate were Fully Recoverable. It is your responsibility to ensure that VAT Recovery Rates have been correctly entered.

When a VAT Rate that is flagged as Partially- or Non-Recoverable is selected on an Invoice or Credit Note Detail line then the Non-recoverable VAT tab displays the Nominal account to be updated with the non-recoverable VAT and the value of the non-Recoverable VAT.

Clicking on the Totals window visible beneath the Detail window will display a summary of any Journal lines entered.

Clicking on a particular Journal line will display the Nominal Account Name and Costing Analysis at the bottom of the window.

This will delete the currently highlighted line.

Double clicking on a particular Journal line will return to the Journal Detail window and display the relevant Journal line allowing it to be edited.

Balance The VAT Voucher can be saved even though the total does not balance to zero, because the System will automatically enter a balancing Contra Journal line analysed to the Contra Account Code on the Header window.

To enter these to the accounts you will need to post a Credit VAT journal.

This will have the effect of Crediting the VAT Control Account with the VAT element of the Scale Charge, and Debiting the VAT Scale Charge Account with the VAT due on the scale charge.

The effect of this on the VAT Return will be to include the amount of VAT in Box 1, and the net figure for the scale charge in Box 6.

The postings can be seen via the Trans drill down > Ref. menu > View Double entry.

Any WFF associated with the transaction will automatically display as a popup window for initial entry. Existing WFF can then be edited by clicking on the Workflow Form button. If no WFF is associated with the transaction, the window will not display.

WFF can be attached to: