Why are there differences between my VAT Return and Profit and Loss report?
You might see differences between the sales and purchases amounts on your VAT Return and Profit and Loss report for the same period for these reasons.
- You may have run your VAT Return and your Profit and Loss report on different accounting bases. That is, you ran one on the cash basis and the other on the accruals basis. Run both reports on the same basis to get an accurate comparison.
- If transactions have a 'No VAT' tax rate on an income or expense account type, they'll be excluded from the VAT Return and included on the Profit and Loss report. Review the VAT Audit Report to see which transactions are using these tax rates.
- Your VAT Return may include late claims from a prior period that would not be included in the Profit and Loss report. You can see any late claims included in the VAT Return on the VAT Audit Report.
- The VAT Return may include transactions coded to a balance sheet account. These transactions won't be included in the Profit and Loss report. You can check for any balance sheet transactions included in the VAT Return on the VAT Audit Report.
- There may be manual journals with a VAT component in the period, but the Show journal on cash basis reports check box isn't checked. These transactions won't be included in the VAT Return.