VAT Adjustments using Manual Journals

If you need to make any adjustments in the values of your VAT Return, you can use Manual Journals.

The table below is a description of how to create Manual Journals to make appropriate changes in the boxes of the VAT Return. The table is for standard VAT Accounting scheme.

While adjusting the values, you can either increase or decrease them. You must enter the value in either Credit or Debit as mentioned below in the table to increase or decrease it.

Box to be adjusted Credit Debit Account VAT Treatment Treat Journal as Notes
Box 1 Increase Decrease Output VAT N/A N/A
Box 2 Decrease Increase Any Expense / Fixed Asset account which is included in VAT Return. EU VAT registered or EU Non-VAT registered. Goods **Here Acquisition VAT Rate is mandatory. In the Standard scheme, the corresponding VAT amount will affect both Box 2 & Box 4 and the Net amount will affect Box 6 & Box 7.
Box 4 Decrease Increase Input VAT N/A N/A
Box 6 Increase Decrease Any Income account which is included in VAT Return. Any VAT Treatment. Any type. If VAT Treatment is EU VAT registered and the type is Goods, then both Box 6 & Box 8 will be affected.
Box 7 Decrease Increase Any Expense / Fixed Asset account which is included in VAT Return. Any VAT Treatment. Any type. If VAT Treatment is EU VAT registered and the type is Goods, then both Box 7 & Box 9 will be affected.
Box 8 Increase Decrease Any Income account which is included in VAT Return. VAT Treatment is EU VAT registered. Goods. This value will affect Box 6 as well.
Box 9 Decrease Increase Any Expense / Fixed Asset account which is included in VAT Return. VAT Treatment is EU VAT registered. Goods. This value will affect Box 7 as well.
Reverse Charge Decrease Increase Any Expense / Fixed Asset account which is included in VAT Return. EU VAT registered, EU Non-VAT registered or Non-EU. Service **Here Reverse Charge VAT Rate is mandatory. This VAT amount will affect Box 1 & Box 4 and this Net amount will affect Box 6 & Box 7.
  • If you would like to alter the Box 4 directly in your VAT Return form, use Input VAT or Output VAT account. On selecting the input or output VAT account, the ‘VAT Treatment’ and ‘Treat Journal As’ fields will be inactive as they are not required.
  • VAT Treatment and Journal Type will be visible only if the International Trade option is enabled in Settings.
  • For Flat Rate Scheme, only the Flat Rate percentage of the gross amount of the adjustment made via journal will be added to the VAT Return. Also, input VAT will not be reflected in Box 4 in the Flat Rate Scheme as it cannot be claimed.

Why am I not able to apply VAT on some accounts or the VAT field has greyed out?


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