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ICB Main Site -> Forum Home -> Level 1 and 2 Bookkeeping -> Input VAT and Output VAT
Input VAT and Output VAT
Sun 15 May 2011 01:27 PM
archie1
No Membership


5 posts
Hello Every one

                          I was just wondering, if some one could explain the difference between, output and input vat ? Im just find it a bit confusing. And how do you if VAT is a debit or a credit. In the VAT account ?

Thanks for reading my question guys.

Kind Regards

Craig.

______________________
Craig Maskell
 
 
 
Sun 15 May 2011 04:45 PM
tedius

tedius

Member CB.Dip PM.Dip
Practice Licence


90 posts
When you purchase goods/services from a supplier then the VAT on this purchase is called input tax and VAT on any goods/servioces that you sell is output tax.

As you can reclaim any input tax this will apear on the debit side and output tax is a credit as you owe it to HMRC.

Hope this helps.

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Mon 16 May 2011 01:10 PM
LizF
Member CB.Dip
Practice Licence


99 posts
The way I remember it is that when you put a Purchase invoice INto your system (as in someone else printed it) it's INput VAT. When you send an invoice OUT to a customer it's OUTput VAT.

Also if you've got cost and sales the right way round in your head then just link the VAT to that. Purchase or INput VAT is on Cost invoice so it's a Debit and Sales or OUTput VAT is on a Sales invoice so it's a Credit.

Hope that helps as well and doesn't confuse you more. Good luck with your studies.

Edited for spelling and formatting.

Edited at 16 May 2011 01:13 PM GMT
 
 
 
Wed 18 May 2011 03:40 PM
archie1
No Membership


5 posts
Hey Guys

         Thanks for the replies, they really helped me understand the whole issue much better.

Thanks very much.

Kind Regards

Craig

______________________
Craig Maskell
 
 
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