Zumzum Financials Knowledge Base
Overview:
In Zumzum Financials, the VAT return for businesses using the “Cash VAT method” is calculated based on transactions involving VAT from various sources. The system considers the VAT elements of bank customer receipts, bank receipts, customer payments on account, and payments to suppliers. When posting transactions such as bank customer receipts or supplier payments, Zumzum Financials refers to the original invoice to apply the correct tax code. The VAT return also encompasses VAT from bank, cash, and credit card receipts and payments, journal entries with relevant tax codes, and transactions involving Reverse Charges tax codes. The detailed breakdown of transactions included in each VAT return box is provided in a comprehensive table.
How is the VAT return calculated for “Cash VAT method”?
Many businesses using Zumzum Financials are VAT registered which means that each month or quarter they must produce and reconcile their VAT Return. This help article will assist you with the processes involved in reconciling your VAT Return.
How the VAT Return calculates
When using the VAT Cash Accounting scheme, the Zumzum Financial VAT Return calculates input and output tax from the VAT element of your bank customer receipts, bank receipts, customer payments on account, bank payments, bank supplier payments and supplier payments on account. When you post a bank customer receipt or bank supplier payment, Zumzum Financials refers to the original invoice to determine which tax code to use.
The VAT Return also includes:
- The VAT element of your bank, cash and credit card bank receipts.
- The VAT element of your bank, cash and credit bank payments.
- The value of any journal entries posted with an appropriate tax code.
- The VAT element of any sales or purchases using the Reverse Charges tax code.
The below table highlights the transactions that are included in each box of your VAT return.
| Box | Transaction Type | Tax Type |
|---|---|---|
| Box 1 | Sales receipt (SR) | Standard Rate & Lower Rate. |
| Box 1 | Sales on Account (SA) | Standard Rate & Lower Rate. |
| Box 1 | Purchase Invoice (PI) | Reverse Charges |
| Box 1 | Purchase Credit (PC) | Reverse Charges |
| Box 1 | Bank Receipt (BR) | Standard Rate & Lower Rate plus Reverse Charges. |
| Box 1 | Bank Payment (BP) | Reverse Charges |
| Box 1 | Journal Credit (JC) | Standard Rate & Lower Rate plus Reverse Charges. |
| Box 1 | Journal Debit (JD) | Reverse Charges |
| Box 1 | Sales Payment (SP) | Standard Rate & Lower Rate |
| Box 2 | Purchase Invoice (PI) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate |
| Box 2 | Bank Payment (BP) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate |
| Box 2 | Journal Debit (JD) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate |
| Box 2 | Purchase Credit (PC) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate |
| Box 2 | Bank Receipt (BR) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate |
| Box 2 | Journal Credit (JC) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate |
| Box 3 | Auto-Calculation | Box 1 + Box 2 |
| Box 4 | Purchase Payment (PP) | Standard Rate & Lower Rate |
| Box 4 | Purchase Payment on Account (PA) | Standard Rate & Lower Rate |
| Box 4 | Purchase Receipt (PR) | Standard Rate & Lower Rate |
| Box 4 | Purchase Invoice (PI) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate plus Reverse Charges. |
| Box 4 | Purchase Credit (PC) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate plus Reverse Charges |
| Box 4 | Bank Payment (BP) | Standard Rate & Lower Rate plus EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate as well as Reverse Charges. |
| Box 4 | Bank Receipt (BR) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate plus Reverse Charges. |
| Box 4 | Journal Debit (JD) | Standard Rate & Lower Rate plus EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate as well as Reverse Charges |
| Box 4 | Journal Credit (JC) | EC Acquisitions Goods Standard Rate & EC Acquisitions Services Standard Rate plus Reverse Charges. |
| Box 5 | Auto-Calculation | Box 3 + Box 4 |
| Box 6 | Sales Receipt (SR) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions |
| Box 6 | Sales Invoice (SI) | EC Sales Goods & EC Sale Services |
| Box 6 | Purchase Invoice (PI) | Reverse Charges |
| Box 6 | Sales Receipt on Account (SA) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions |
| Box 6 | Sales Payment (SP) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions |
| Box 6 | Bank Receipt (BR) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions plus EC Sales Goods & EC Sale Services. As well as Reverse Charges. |
| Box 6 | Bank Payment (BP) | EC Sales Goods & EC Sale Services plus Reverse Charges |
| Box 6 | Journal Credit (JC) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions plus EC Sales Goods & EC Sale Services. As well as Reverse Charges. |
| Box 6 | Journal Debit (JD) | EC Sales Goods & EC Sale Services plus Reverse Charges |
| Box 7 | Purchase Payment (PP) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions |
| Box 7 | Purchase Payment on Account (PA) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions |
| Box 7 | Purchase Receipt (PR) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions |
| Box 7 | Bank Payment (BP) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions plus EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated. As well as EC Acquisitions Services Standard Rate & EC Acquisitions Services Zero Rated plus Reverse Charges |
| Box 7 | Bank Receipt (BR) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated. As well as EC Acquisitions Services Standard Rate & EC Acquisitions Services Zero Rated plus Reverse Charges |
| Box 7 | Purchase Invoice (PI) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated. As well as EC Acquisitions Services Standard Rate & EC Acquisitions Services Zero Rated plus Reverse Charges |
| Box 7 | Purchase Credit (PC) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated. As well as EC Acquisitions Services Standard Rate & EC Acquisitions Services Zero Rated plus Reverse Charges |
| Box 7 | Journal Debit (JD) | Standard Rate, Lower Rate, Zero Rated & Exempt Transactions plus EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated. As well as EC Acquisitions Services Standard Rate & EC Acquisitions Services Zero Rated plus Reverse Charges |
| Box 7 | Journal Credit (JC) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated. As well as EC Acquisitions Services Standard Rate & EC Acquisitions Services Zero Rated plus Reverse Charges |
| Box 8 | Sales Invoice (SI) | EC Sales Goods |
| Box 8 | Bank Receipt (BR) | EC Sales Goods |
| Box 8 | Journal Credit (JC) | EC Sales Goods |
| Box 8 | Sales Credit (SC) | EC Sales Goods |
| Box 8 | Bank Payment (BP) | EC Sales Goods |
| Box 8 | Journal Debit (JD) | EC Sales Goods |
| Box 9 | Purchase Invoice (PI) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated |
| Box 9 | Bank Payment (BP) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated |
| Box 9 | Journal Debit (JD) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated |
| Box 9 | Purchase Credit (PC) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated |
| Box 9 | Bank Receipt (BR) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated |
| Box 9 | Journal Credit (JC) | EC Acquisitions Goods Standard Rate & EC Acquisitions Goods Zero Rated |
Learn more about calculating your VAT return in Zumzum Financials.