VAT: registration, invoicing and the return
What you collect on the authority's behalf, what you deduct of what you paid, and the difference is what you remit. The tax invoice is the condition that makes the deduction possible at all.
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What you collect on the authority's behalf, what you deduct of what you paid, and the difference is what you remit. The tax invoice is the condition that makes the deduction possible at all.
The decision it supports
Start with “Output and input”, then use the explanation to choose the next treatment or check.
What you receive
Work note: VAT: registration, invoicing and the return
A structured explanation, every official rate with source and review date, then a direct path to a lesson, tool or track.
An example you can inspect
Apply the decision: Output and input
Output tax is what you collect from customers on your standard-rated sales. Input tax is what you paid suppliers on your purchases. The net between the two accounts is what is remitted for the period — or refunded, if input exceeded output.
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Output and input
Output tax is what you collect from customers on your standard-rated sales. Input tax is what you paid suppliers on your purchases. The net between the two accounts is what is remitted for the period — or refunded, if input exceeded output.
Neither passes through the income statement: both are balance-sheet accounts, because the money was never yours and was never owed by you — it is passing between you and the authority.
The tax invoice is the condition for deduction
Input tax is deducted only against a tax invoice carrying its elements: both parties' tax registration numbers, the issue date, a description of the supply, the amount before tax, the rate and amount of tax, and the total.
Which is why supplier invoices are reviewed on receipt rather than at filing: an incomplete invoice found two months later may already be past the window for the supplier to correct it.
The regulatory figures in this article
Standard VAT rate — 15%
When persons subject to VAT sell a good or provide a service, they must charge tax at a rate of 15% (assuming that the standard rate applies to those supplies), which is added to the final selling price.
The standard rate applies where the supply is standard-rated. Exempt and zero-rated supplies are treated differently, and the source itself qualifies the figure with "assuming that the standard rate applies".