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Thread: VAT write off

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    Question VAT write off

    Hi all, quick question...i have a VAT balance on my balance sheet that I need to adjust to show the true value at YE. Can one write off the balance to P&L? Unfortunately time is of the essence so unable to go through all the transactions for FY.
    Appreciate the assistance

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    Site Caretaker Dave A's Avatar
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    What P&L account do you propose posting against?

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    i have a irrecoverable expense account on my P&L or what would be the best solution?

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    Site Caretaker Dave A's Avatar
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    How did the incorrect balance arise in the first place?

    Output VAT does not manifest in any P&L account.
    If any VAT on purchases is not claimable as Input VAT, ordinarily it is included in the capture of the expense.

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    Our business only claim Input VAT...no output tax, problem arises when there assessments and SARS denies a portion

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    Full Member padjakkels's Avatar
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    Shouldn't that portion then be added back to the expense?

    Eg. let say you tried to claim VAT of R14 back entertainment of R100. Your expenses shows R100, which is correct. Input VAT shows R14. But SARS don't allow it.

    So now you expense must change to R114, so that is why you have to add the portion back to your expense.

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