Why does my Tax summary show these figures when my VAT figures for that period where a lot higher, this shows in all of my business. Where am i going wrong? What is going on? I have looked and there is a journal in the periods that look wrong, however i have not entered this journal!!! HELPP???
“VAT Liability” is the nominal account where the journals created when you do a VAT return put the final amounts that you will have to pay to HMRC. The value in there would then normally be cancelled out when you tag the actual bank payment as “tax payment to HMRC”, but if you haven’t been recording the payments to HMRC from the bank then the VAT Liability nominal will be the sum total of all your VAT liabilities from all your previous returns.
I have been doing that when we pay through the bank, i tag it to the VAT liability account!
In that case you need to find that nominal in the chart of accounts or trial balance and work your way back through the detailed ledger until you find the transaction or transactions that are causing the problem.