Journals can be included on VAT returns, however, the journal must include a line that will either Dr or Cr the VAT control in combination with selecting the correct Include in Sales/Purchases checkboxes. The summary at the bottom describes the different ways in which the checkboxes can be used to include a journal in a return.
Step 1.
Navigate to Tools > Journals > All journals and click on the Create Journal button.
Step 2.
Ensure you have the correct debits and credits. The journal must include a line which will either Dr or Cr the VAT Control account.
The journal must also have a Journal summary and an Accounting date.
To include this on the VAT return, you will need to use the tick boxes towards the right-hand side and choose between Sales or Purchases. Hit the Post Journal button to complete.
To see the effect of the journal, navigate to Tax > VAT > VAT Return and click on the Create custom VAT report button, select the date range the journal is within and hit the Search for invoices button. In this example the journal appears as a positive amount in box 4 only.
Include in VAT return checkbox summary
Box 1 and 4
A journal will affect box 1 or 4 if the VAT control line on the journal is ticked to show in sales or purchases.
If the journal credits VAT control and the Sales checkbox is ticked, then the journal will show this amount in box 1 as a positive amount.
If the journal debits VAT control and the Sales checkbox is ticked, then the journal will show this amount in box 1 as a negative amount.
If the journal credits VAT control and the Purchase checkbox is ticked, then the journal will show this amount in box 4 as a negative amount.
If the journal debits VAT control and the Purchase checkbox is ticked, then the journal will show this amount in box 4 as a positive amount.
Boxes 6 and 7
Other account codes (i.e not the VAT control account) affect boxes 6 & 7. You can use this in combination with the above to make journals appear in box 1 & 6 or 4 & 7.
If the journal credits any account (other than VAT control) and the Sales box is ticked then the journal will show this amount in box 6 as a positive amount.
If the journal debits any account (other than VAT control) and the Sales box is ticked then the journal will show this amount in box 6 as a negative amount.
If the journal credits any account (other than VAT control) and the Purchase box is ticked then the journal will show this amount in box 7 as a negative amount.
If the journal debits any account (other than VAT control) and the Purchase box is ticked then the journal will show this amount in box 7 as a positive amount.
