Run Xero's VAT Audit Report to see transactions that make up the VAT owed by or to your organisation for the VAT period being reported. Xero runs the VAT Audit Report in conjunction with the VAT Return or the Flat Rate VAT Return. (You can access the Flat Rate VAT Return by clicking on the 'VAT Audit Report' tab next to the Return). You can't run the VAT Audit Report directly from Report Centre.
Xero uses only one VAT account. The VAT portion of all transactions you enter into Xero go into this account to be used to create the VAT Return. If you add additional VAT accounts to your Chart of Accounts, any VAT amounts assigned to them won't be included in your VAT Return or VAT Audit report. You can also read an overview of how VAT is treated in Xero in The accounting behind Xero.
If your organisation isn't registered for VAT, none of the VAT-related reports will display in Report Centre.
Help on this page:
- Generate the VAT Audit Report
- View transactions in the list
- The Reference column
- View the source transactions
- Switch back to the VAT Return
- Publish the report in Xero
- Printing and exporting
Elsewhere in Help Centre:
Xero generates the VAT Audit report directly from the VAT Return (or the Flat Rate VAT Return) based on the period the VAT Return is for. You need to complete all the VAT details in Financial Settings before running the VAT Return and VAT Audit Reports so they are accurate.
- The report shows the transactions belonging to each VAT rate chosen when you entered a transaction, plus a section for those entered with no VAT.
- Late claims (if any) will show under a special section for the applicable tax rate(s). For example, '20% VAT on Income (Late Claims)' will appear separately from the 20% VAT on Income transactions falling within the reported period.
- VAT adjustments (if any) will display in a special section for each applicable tax rate, for example,'Total 17.5% (VAT on Expenses) - Adjusted'. Note that only the amounts entered into the Tax Amount column will display on the VAT Audit Report - what appears in the tax adjustments box on the invoice or credit note will be ignored.
- Flat rate VAT returns will show all transactions for the period reported, even if many of them do not attract VAT. The additional flat rate VAT codes (VAT on Capital Sales and VAT on Capital Purchases) will be displayed on the report.
- You can match subtotals for gross and tax amounts for each Tax Rate to totals automatically populated on the VAT Return.
- Transactions listed in the 'No VAT' section of the report are not included on the VAT Return. These are transactions where you chose that transaction amounts had 'No Tax' or 'No VAT' on a line item.
- How does the VAT Return work in Xero? has more details on how Xero populates the VAT Return.
Regardless of the date of a transaction, its amount will only be recorded against an account in your Chart of Accounts and be picked up for VAT once it has been approved, that is, invoices or bills that have been approved and are on the Awaiting Payment tabs, or expense claims that have been authorised. Bank transactions, that is, Receive or Spend Money, bank account transfers and invoice or bill payments display immediately.
The Reference column shows a reference from the source transaction, if any exists.
- On a Sales...
- invoice it will show the invoice number.
- credit note it will show the credit note number. On a refund, it will show first the payment Reference field if there is one, then the credit note number.
- invoice payment it will show first the payment Reference field and then the invoice number.
- On a Purchases...
- bill, expense claim receipt, Spend Money or Receive Money transaction, it will show the reference (if any).
- credit note, it will show the reference. On a refund, it will show first the payment Reference field if there is one, then the credit note reference.
- bill payment, it will show first the payment Reference field and then the reference.
- expense claim payment, it will show first the payment Reference field and then the reference (if a single claim - otherwise it will be blank).
- On Manual Journals it will show the journal number which appears on a posted journal and journal report.
- On payslips or wage payables it will show the reference.
Click on the reference or account name to drill down into the original invoice, credit note, transaction or expense claim to see the VAT component.
Click the VAT Return tab to switch back to the Return that the transactions are displaying for.
If you are viewing a VAT Return and Audit Report that has been saved or published by
someone with the Adviser user role, you may see summary information or additional notes
on the report. Depending on the status of the report and your role you will be able to
export, archive, save or edit it.
Reports and budget role comparison
Publish the VAT Audit Report in Xero to your list of published reports in order to keep a record of your VAT transactions for the period.
- Click the File VAT Now... button.
- Click the Publish button on the VAT Return (Draft) report.
- Click the Publish VAT button.
You won't be able to file your VAT Audit report with HMRC.
- Go to Reports > All Reports to see your VAT Audit report under the Published tab.
We recommend you publish your VAT Returns in Xero in sequence. This ensures any VAT transactions entered after their relevant VAT period are not accounted for twice.
Provided your user role allows, you can export the VAT Audit Report to Excel, PDF or Google Docs formats. You can also print directly from your browser using the Print button.
Note: both VAT reports will export as one
When you export the VAT Audit Report to PDF, the VAT Return will print in the same PDF.
Similarly, when you export your VAT Audit Report to Excel or Google Docs, you will export both reports, with each report displaying on a separate tab.