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Thread: Input & Output VAT

  1. #11
    Full Member greghsa's Avatar
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    Quote Originally Posted by DaisyGirl View Post
    Thanks Greg, I can wrap my head around the In (through the door) and Out (through the door) concept; just trying to see why what I owe is an Asset and what I can claim is a Liability! (Some of us just don't think like you accountant types :-)
    If you owe SARS it is a libility, if SARS owes you it is in asset.
    Lets say you buy something for R50 + R7 VAT = R57
    Now you sell it for R114 (R100 + R14 VAT)

    Input R7
    Output R14
    Nett Effect is R7 Output (OUTput means you must pay OUT to SARS)
    [If the net is Input SARS must pay IN to your bank account !]

    Might get a bit technical here (Sorry)
    Accounting Entries
    DR Purchases R50
    DR Vat R 7
    CR Supplier R57

    CR Sales R100
    CR VAT R 14
    DR Customer R114

    Net effect of Vat is R 7 DR + R 14 CR = R 7 CR Therefore a liability

  2. #12
    Site Caretaker Dave A's Avatar
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    I'd put it slightly differently - and I think this is a closer starting point:
    Quote Originally Posted by DaisyGirl View Post
    Input being an Asset when I owe it and Output being a Liability when my head sees it more as an Asset (because I can offset it against the Input VAT) is not sitting well with me!
    The point of view for your input and output VAT accounts is your liability to SARS i.r.o. VAT - not the client or supplier.

    For example, with a supplier you've incurred a liability of R50.00 for goods or services purchased and R7.00 for the VAT. You need to claim that VAT back from SARS, hence it's an asset.

    The exact reverse applies when you're talking about invoices to clients. The VAT you collect from the client is owed to SARS, hence it's a liability.
    Last edited by Dave A; 14-Sep-10 at 10:29 PM.
    Seeing opportunity changes nothing. Seizing opportunity and running with it changes lives.

  3. Thank given for this post:

    greghsa (15-Sep-10), rfnel (25-Nov-11)

  4. #13
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    Greg... thanks, but I don't see Wages there anywhere. The 05 code had me thinking that maybe Wages falls under something other than 00?

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    Thanks tons, that's clear. Much appreciated.

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    Full Member greghsa's Avatar
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    Quote Originally Posted by Dave A View Post
    I'd put it slightly differently - and I think this is a closer starting point:

    The point of view for your input and output VAT accounts is your liability to SARS i.r.o. VAT - not the client or supplier.

    For example, with a supplier you've incurred a liability of R50.00 for goods or services purchased and R7.00 for the VAT. You need to claim that VAT back from SARS, hence it's an asset.

    The exact reverse applies when you're talking about invoices to clients. The VAT you collect from the client is owed to SARS, hence it's a liability.
    LAYMENS Terms Thanks Dave.

  7. #16
    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by greghsa View Post
    LAYMENS Terms Thanks Dave.
    One of the advantages of not being formally trained in these things
    Seeing opportunity changes nothing. Seizing opportunity and running with it changes lives.

  8. #17
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    Actually, Milk, bread, vegetables etc should go against 02 (Zero rated) and interest and for example residential rental income against 03 (exempt income).

    Another thing I like to do to make sure my turnover balances with my f/statements, is I create a seperate VAT type for debit and credit retuns..

  9. #18
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    I agree Dellatjie, but if the supplier is not registered for VAT, then we would use 00?

  10. #19
    Silver Member vieome's Avatar
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    Quote Originally Posted by dellatjie View Post
    Actually, Milk, bread, vegetables etc should go against 02 (Zero rated)
    white bread has VAT on it, me thinks.

    If using pastel the best thing to do, is to export 9500 VAT account for the period to excel sheet, in Excel sort sheet using column B - sales together/ Purchases Together/ Journals/sales credits etc together.




    Output Vat: Items

    Sales
    Sales Credits -
    Customer JNLS
    Adjustment to previous periods -



    Input Vat : Items

    Capital Goods -

    Other Goods & Services
    Purchases
    Purchase returns -
    Supplier JNLS

    Cashbook Payments 1
    Cashbook Receipts 1
    Cashbook Payments 2
    Cashbook Receipts 2
    Supplier Jnls
    General JNL
    Adj to previous periods


    Nett vat (Payable)/Refundable (Diff between input and output VAT)

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    Good Afternoon,
    Is there a way that I can see all the previous (updated) general journals that was passed in pastel. My vat control account does not balance with vat return, I have reconciled all other possibilities and my last check would be if there has been journals passed directly into the vat control account.

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