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VAT Return

Work out the VAT you owe or can reclaim for a period, by VAT posting setup and tax code, and drill down to the ledger lines behind each figure.

For accountants and whoever files the vat returnUpdated 4 Nov 2026

Before you start

  • Set up taxesEach VAT tax needs its rate and its VAT account (a liability account for output VAT). A VAT tax pointed at an expense account never reaches the return.
  • Set up posting groupsThe VAT posting setup (customer or vendor group with product group) decides which VAT applies to each line. The return is grouped by these setups.
  • Close a periodMonths and quarters are your fiscal periods.
  • Set up dimensionsOnly if you file VAT separately for a branch or other dimension value.
In this article
  1. Steps
  2. How the figures are worked out
  3. Related

The VAT Return adds up the VAT on everything posted in a period: output VAT on your sales, input VAT on your purchases, and the difference you pay (or reclaim). It works on the accrual basis: a document counts in the period it was posted, paid or not. A reversed document and its reversal cancel out.

Steps

  1. Open the VAT Return and run it

    In the menu on the left, select Reports, then Tax Reports, then VAT Return.

    1. Period: usually Month or Quarter, matching how often you file.
    2. A date in the period (or Up to for Year to date).
    3. More Filters: one or more dimension values.
    4. Run.
    5. Export to Excel: the return as on screen.
    6. When nothing with a VAT posting setup posted in the period, you see "There is no VAT activity in this period."

  2. Read the return

    At the top: Output VAT, Input VAT, Net VAT (output − input) and Position: VAT payable, VAT refundable or Nil.

    By VAT posting setup has one line per setup with its Tax, Rate and number of Lines, then:

    ColumnWhat it is
    Output VAT on salesVAT credited on invoices and other sales documents.
    Less credit notesVAT taken back by credit notes.
    Reverse-charge VATVAT you account for yourself on purchases under the reverse charge.
    Output VATThe three above together.
    Input VAT on purchasesVAT debited on bills.
    Less debit notesVAT taken back by debit notes.
    Input VATThe two above together.
    Net VATOutput VAT less input VAT.

    Select View lines on a setup, or View all lines at the top of the table, to see the ledger lines with their Date, Account, Source, Party, Narration, Debit and Credit.

    By tax code gives the same totals per tax code. Excluded from the return lists setups whose tax is not VAT (for example withholding tax), with the reason and the amount.

How the figures are worked out

  • Only general ledger lines that carry a VAT posting setup count. That is every VAT line an invoice, credit note, bill or debit note posts.
  • Each line's effect on Net VAT is its credit less its debit, so Net VAT always equals the net movement on the VAT accounts from these documents.
  • Whether a line is output, reverse-charge or input VAT is decided by the account (the setup's sales, purchase and reverse-charge VAT accounts). When one account is used for both sales and purchases, the document decides.
  • Lines on an account that is no longer a live posting account are left out, and the page says how many.