VAT review ― output tax

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • VAT review ― output tax
  • Sales invoices
  • VAT accounting
  • Incidental transactions
  • Land and property transactions
  • VAT accounting schemes
  • International transactions
  • Other transactions

This document should be used in conjunction with this Checklist when either undertaking a VAT review or completing the VAT return. Business may also wish to undertake an input tax review at the same time and more information can be found in the VAT review ― input tax guidance note and the Checklist ― VAT review ― input tax template.

Sales invoices

Businesses must ensure that they issue a valid tax invoice to all relevant customers. More information can be found in the VAT invoice requirements guidance note.

If the business issues electronic invoices then they must ensure that these invoices meet the relevant requirements outlined in the Electronic invoicing guidance note.

If the business has agreed with its customer to issue self-billed invoices then they must ensure that the relevant conditions are met. More information can be found in the Self-billing guidance note.

VAT accounting

The business must ensure that it records its transactions in the correct VAT return period and that the VAT treatment of its transactions have been recorded correctly in its books and records.

The business must ensure that its output tax records have been reviewed for errors and omissions as output tax errors can occur as a result of omission, misposting or misunderstanding when transactions are recorded in the accounting and other financial records.

For example, it is possible for sales invoices dated towards the end of a VAT return period to be accidentally excluded if the computerised VAT return report is run before all relevant sales invoices have been posted.

The business must check and confirm whether all relevant supplies have been identified and whether the level of calculated outputs is consistent with levels of expenditure and income expected by the business.

A general review of output tax postings prior to submission of the VAT return

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