Question
Why is there a difference between the VAT Analysis and the HMRC 9 Box Return and how do I resolve this?
Answer
The VAT Analysis report and the HMRC 9 Box Return report may sometimes differ in value due to the included and excluded tax types.
To find these reports first go to Accounts > Nominal Ledger > Reporting > VAT Analysis > Reporting, and select the report type that you wish to display.
You can see the VAT Analysis report for the last period in the summary box at the bottom of the page, or for the last three periods when Quarterly Report is ticked.
Take note of all the VAT figures in particular Sales to Internal and Purchases from Internal, now change the report type to the HMRC 9 Box Return and compare the figures.
For example, can see from this report that Box 6 for 'Total value of sales and all other outputs excluding VAT' and Box 7 for 'Total value of purchases and all other inputs excluding any VAT' do not match the Total Sales and Total Purchases in the VAT Report.
You are able to double click into the box on the report and this will display the HMRC 9 Box Return report, broken down by Box, then by Tax Category, allowing you to review the figures that are included and excluded.
There are figures excluded due to the fact that HMRC has specified that they do not want to receive submissions with internal tax types on them, only submissions with the tax types of Home or EU.
The reason is that any internal transactions that you do as a business should not carry tax on them.
Therefore if you add Sales from Internal and Purchases from Internal to the 9 Box HMRC return Box 6 and Box 7, you can see that the figure account for the Total Sales and Total Purchases.
You may still wish to include your internal tax figures but the tax types on these transactions will need to be changed to either Home or EU for them to be submitted to HMRC by a journal or adjustment journal depending on the periods which you have open.
In that case, the internal tax balance will have to be journaled out to a suspense nominal under the tax type of internal. Then, once this has left the account it should be in and resides in the suspense nominal, you can journal it back into the original account, putting the tax type as home. This will then include the internal tax figures on the 9 box return.