How to account for Value-Added Tax (VAT)

How do you complete a VAT 3 return?

The VAT 3 return records the Value-Added Tax (VAT) payable, or reclaimable, by you in your taxable period. You should complete the return as follows:

T1 – VAT on sales

This figure is the total VAT due on your:

• supplies of goods and services
• intra-Community acquisitions of goods
• import of goods, where you have applied VAT Postponed Accounting
• received services, as appropriate.

T2 – VAT on purchases

This figure is the total VAT which you are entitled to reclaim in respect of costs incurred by you on:

•  goods and services, insofar as they relate to your taxable supplies and qualifying activities.
• intra-Community acquisitions of goods
• import of goods where you have applied VAT Postponed Accounting
• received services
• flat-rate addition.

Where you issue, or receive, a credit note, you may adjust the T1 and T2 figures.

T3 – VAT payable

VAT is payable to Revenue where the T1 figure is greater than the T2 figure. The amount payable is the difference between the two figures.

T4 – VAT repayable

VAT is repayable to you where the T2 figure is greater than the T1 figure. The amount repayable is the difference between the two figures.

You may have a taxable period where no VAT is payable, or repayable. In this instance your VAT 3 must be returned marked zero at T1, T2 T3 and T4.

Please note: Do not insert 'nil' on any line.

E1 – intra-European Union (EU) supplies of goods

This is the total value of goods sent to customers in other EU countries.

E2 – intra-EU acquisitions of goods

This is the total value of goods received from suppliers in other EU countries.

ES1 – intra-EU supply of service

This is the total value of services supplied to customers in other EU countries.

ES2 – intra-EU acquisition of services

This is the total value of services received from suppliers in other EU countries.

PA1 – postponed accounting

This is the total of the Customs value of goods imported under postponed accounting, as per Customs Declarations plus Customs Duty.

Please see Further guidance for information in respect of obligations to file electronic VAT returns and make payments via Revenue Online Service (ROS).

Next: Repayment of VAT