VAT reconcilation to turnover

Basic example


A company with a September year end  
From its trial balances:    
Debtors @ 30/09/2018      55,000  
  30/09/2019       43,000  
Turnover Y/E 30/09/2019   168,000  
Turnover per its quarterly VAT returns (cash accounting) 
Quarters    Net sales per VAT return 
31-Dec      35,000  
31-Mar      45,000  
30-Jun      25,000  
30-Sep      75,000  
VAT turnover =    180,000  
The reconciliation      
Take VAT turnover   180,000  
Closing debtors   43,000  
Opening debtors    (55,000)  
= Turnover per the accounts   £168,000  


The above is a simplistic calculation.

If you are not cash accounting for VAT it should be easier to check the figures as you do not have to consider the effect of cashflow. Where you have different VAT tax points, these will make a difference.

You may find that you have differences in your reconciliation. These may arise from:

  • Duplicated sales invoices
  • Sales refunds misposted or not adjusted for in your VAT returns
  • Bad debts written off and later recovered
  • Cash receipts misposted
  • Late adjustment claims and adjustments
  • Banking differences
  • Credit notes posted as late claims

It is advisable if there is a difference to:

1) Review any manual journals or adjustments that affect sales or VAT.

2) Check that your accounts all reconcile, e.g. the balance sheet balances, your bank reconciles, your sales ledger balance matches your closing debtors list.

3) Re-check your VAT return and sales figures.


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