Use Pearl to produce your VAT returns. If you have entered information correctly for each sale, processed refunds correctly and entered invoices properly, then the VAT return is a simple operation:

• Set the VAT scheme you are using (Setup->Company from the main menu)
• Open the VAT return using Accounts->Reports->VAT Return from the main menu
• Select dates as shown on your paper VAT Return
• Choose whether to include reconciled transactions in the current period *
• Choose whether to include unreconciled transactions prior to the chosen period **
• Choose whether to display a detailed report
• Click Submit to show what you owe.
• Copy the numbers to your paper VAT Return
• Click "Reconcile VAT Return" to mark all the include transactions as reconciled for VAT. This means that they will not be included on a future VAT Return unless you specifically choose to "include current reconciled" when you run the VAT Return again.

It's a good idea to display and print a copy of the detailed report for your records before you reconcile the VAT transactions.

For the Standard VAT scheme, the VAT Return displays relevant tax for all invoices on their invoice date, regardless of whether they have been paid or not.

For the Cash-based VAT scheme, Pearl will display all cleared transactions (ie Bank receipts and payments, supplier and customer invoices that have been cleared 100%). If an invoice has not been completely paid, then it will not be included.

Once a transaction has been reconciled for VAT you will not be able to change it. It is good practice to ensure that all Pearl bank records have been reconciled with the bank statements for the VAT period first to reduce the chance of errors.

Reconciling the VAT return

When you reconcile the VAT return, the current balance of the Sales and Purchase tax control accounts will be cleared down to your VAT liability account.

Paying the VAT

When you make a bank transfer to the Inland revenue, or write a cheque for the VAT amount, enter a Bank Payment to the VAT liability account. The balance of the VAT liability account should be the same amount as you are paying. To check the balance of the VAT liability account, view the Trial Balance.

If you are due to receive payment from the Inland Revenue, enter a Bank receipt instead.

Viewing previous VAT returns

You can view the transactions that have been included on previous returns by opening Accounts->Reports->VAT History from the main menu.

* Transactions that have already been reconciled for VAT using the VAT Return page. The normal setting for this option should be no.
** The normal setting for this option should be yes. This will include transactions with a date during any previous VAT period that have been entered into your accounts since the last VAT report was produced.

Before producing your VAT return you should enter all transactions into Pearl and reconcile all bank accounts up to the end date of the VAT period.

EC Sales list

Pearl will produce an automatic EC Sales list for the Inland revenue. Click Accounts->Reports->EC Sales list.