Under the cash receipts basis, VAT only becomes payable upon receipt of cash in the settlement of a sale. If a sales invoice has been made you need not pay the VAT to the revenue until you receive settlement of the invoice, upon settlement the VAT becomes payable on the portion of the sale for which settlement has been received.

Total VAT portion of Sales Invoices for which there are receipts in the period

Less- Total VAT on Purchases

Equals-VAT Payable/(Reclaimable) from the Revenue

Reports > Vat Reports > Normal Vat Reports

• Date From- Enter the first day of the VAT period which you are preparing
• Date To- Enter the last day of the VAT period which you are preparing
• Prepare- The report is prepared
• Close the VAT Summary
• You must now click on Cash receipts basis.

A VAT on the debtor report will automatically be generated at the relevant date. This report totals the VAT figure which remains outstanding to be received. It is advisable to print this report and maintain it as part of the working paper for the VAT return.

•  Close the VAT on Debtors Report- You will automatically be returned to the initial normal VAT report
• Prepare- Click Prepare on the Normal VAT report, the VAT on Sales figures will now automatically be adjusted to account for VAT on receipts ONLY.
• Print- Print the VAT Summary and the main VAT report and maintain them with the VAT on Debtors report to back up the figures returned to Revenue.

Tagging

Once satisfied that all the VAT reports are correct and have captured all transactions tick the box to tag the transactions.  This is a method of marking the invoices which have now been included in a return to the Revenue and so excludes such transactions from future returns. The tagging process prevents the amendment of any tagged transactions.

Note: Once the report has been tagged the tagging process cannot be reversed, it is advisable to take a backup before tagging in the event that you may need to restore the company accounts to the point before tagging.

Restoring a back taken before the tagging is the only method of “reversing” this process however any data entered between the date of the backup and the current date will be lost if a backup is restored.

Upon preparing a VAT return all supporting reports used should be printed at the time of the return preparation and maintained for future reference. For any issues or subsequent revenue VAT audit which may arise with the return, it is important that you have a paper trail to refer to.  This will also simplify the financial year-end reconciliation of VAT for the accountant.