Simple Book-keeping

7. VAT

If your business registers for VAT you will need to make some changes.

7.1 There will be very few complications on the sales side.

• You must issue VAT invoices.
• You should enter the details of the VAT in a separate column in the Cash Book.

7.2 The golden rule is that you must have a VAT invoice for all purchases.

• For small purchases of standard-rated (17.5 per cent) goods, you can calculate the VAT paid. Total cost x 17.5/117.5 (ie multiply by 7/47).
• Enter the details of the VAT in a separate column in the Cash Book.
• Enter the total under 'total' in the Cash Book, enter the total less VAT under the individual heading (eg stationery).