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The Summary of VAT returns - BS rec reconciles the VAT control account balance carried in the trial balance to the amounts declared on the VAT returns filed during the period. It is laid out box by box in the format of the VAT return itself (Boxes 1 to 9), rather than as a simple due or refund schedule. It is the older of the two working papers that do this job (see the FAQ below) and is superseded on new files by the VAT closing balance reconciliation, although it remains available and on some older files is still the version in use, for continuity.

Table of contents 

When should I use this template?

Use this template wherever the company is VAT-registered, carries a VAT control account balance that needs reconciling at the year end, and the file is continuing to use this version rather than the VAT closing balance reconciliation.

On a new file, the VAT closing balance reconciliation is the current working paper for this purpose. This template only continues to apply on an established file where it is the one currently starred.

Before you start

  • Confirm which of this template and the VAT closing balance reconciliation is currently starred. Only one should be, because starring is what feeds the rest of the VAT templates (see below), and a warning appears if both are starred at once.
  • Know the company's VAT scheme (flat rate, cash accounting, accrual, annual, or other) and filing frequency (quarterly, with the number of quarters to show, monthly, or annually).
  • Check the nominal code or codes that hold the VAT control account balance. The template defaults to account range 240502, 250502. Override this on the template if the client's chart of accounts uses different codes.

Background

The VAT recognised in the ledger does not always exactly match what is declared on the VAT return for the same period. This is most obvious under the cash accounting scheme, where output and input tax follow cash received and paid rather than invoice dates. This template exists to reconcile the two and isolate any genuine difference, rather than leaving the balance sheet figure unsupported.

Steps

Step 1: Select the VAT scheme and filing frequency

Select the VAT scheme (choosing Other reveals a free-text box to describe it) and the Frequency: Quarterly (which reveals a further Number of quarters dropdown, 1 to 10, defaulting to 4), Monthly or Annually. This determines how the return schedule below is split into columns: an opening adjustment column, one column per period, and a closing adjustment column.

Step 2: Complete the VAT-return boxes for each period

For each period column, attach the VAT return or supporting evidence, then enter the figures exactly as declared on that period's VAT return:

  • Box 1: Output VAT (total), which also splits out Output VAT - fuel scale charge for information, with Output VAT - sales calculated as the remainder
  • Box 2: VAT due on acquisitions from other EC states
  • Box 3: calculated automatically as Box 1 plus Box 2
  • Input VAT and VAT due on other EC acquisitions, feeding Box 4: Input VAT reclaimed
  • Box 5: calculated automatically as Box 4 less Box 3, the VAT payable or receivable for that period
  • Box 6: Net outputs (sales/turnover)
  • Box 7: Net inputs (purchases)
  • Box 8 and Box 9: supplies to, and acquisitions from, other EC member states

Each row's Total column sums every period entered.

Step 3: Reconcile the opening VAT balance

Select the VAT nominal code or codes making up the VAT control account (defaults to 240502, 250502). The template lists each account's balance at the start of the period and totals them as the opening VAT balance. It then adds the current period's Box 5 movement, any bank payments or refunds entered (each with its own attachment), and, if Cash accounting scheme is selected, the required opening and closing VAT-on-debtors and VAT-on-creditors adjustments, plus any other adjustments, to reach a Recalculated VAT (payable)/receivable figure.

Step 4: Complete the closing reconciliation

The same nominal codes are totalled again to show the closing VAT balance per the trial balance, which is compared against the recalculated figure from Step 3, with an unreconciled indicator against any difference.

Step 5: Star the template

Star this template if you want it, rather than the VAT closing balance reconciliation, to feed the VAT turnover reconciliation and the VAT account reconciliation. A warning appears if both this template and the VAT closing balance reconciliation are starred at once.

What flows through to the rest of the accounts/workflow?

When starred, this template's Box 6 figures for each period, together with its frequency and period structure, are read directly by the VAT turnover reconciliation to build its own turnover-to-Box 6 reconciliation over the same periods. The same starring also determines what the VAT account reconciliation account template reads. Together this supports the VAT creditor or debtor figure and its note in the accounts.

What rolls forward next year?

Nothing carries forward automatically. The VAT scheme, frequency, every period's figures and every adjustment are entered (or re-imported) fresh each year, although the structure, meaning the periods and box labels, regenerates itself from the period dates and your frequency and scheme selections.

Where the data comes from

The VAT control account balance comes from the selected nominal codes in the trial balance, both for the opening balance (prior year) and the closing balance (current year). The Box 1 to 9 figures are entered manually from the VAT returns filed with HMRC, evidenced by the attachments provided. Bank payments, cash accounting adjustments and other adjustments are entered manually to complete the reconciliation.

Frequently asked questions

What is the difference between this template and the VAT closing balance reconciliation?

They do the same underlying job and are mutually exclusive, so only star one. This template is the older, box-by-box layout. The VAT closing balance reconciliation is the current version, with a simpler due or refund schedule and its own difference-explanation feature. Older files may still be starred on this one.

Why does selecting Cash accounting scheme change the template?

Under cash accounting, VAT is accounted for on cash received and paid rather than on invoice or tax point dates, so the ledger balance and the return figures can differ by the VAT embedded in debtors and creditors. Selecting this scheme reveals the required adjustment fields so the reconciliation ties out.

Why is my template showing as unreconciled?

Check that the correct nominal codes are selected, and that bank payments, cash accounting adjustments and other adjustments have all been entered to explain any remaining difference.

Do I need to star this template?

Only if you want it, rather than the VAT closing balance reconciliation, to feed the VAT turnover reconciliation and the VAT account reconciliation.

This template and the VAT closing balance reconciliation are mutually exclusive. Star only one of them: the starred template is the one that feeds the VAT turnover reconciliation and the VAT account reconciliation, and Silverfin shows a warning if both are starred at the same time.