VAT

Your documents record VAT as you post them. The VAT return screen adds that VAT up for a period, so you can file with the FTA. LedgerLite sends nothing to the FTA: you file yourself, then record it here. When you lock the figures of a return, its net VAT moves into one account, VAT due to/from FTA. Paying the FTA, or receiving a refund, then clears that account against your bank.

Where

Detailed Reports › Tax › VAT return. Registration and rates: Settings › VAT rates

Number

The return has no number. Each entry it posts has a journal number (JE-…)

Posts to

Output Tax Payable, Input Tax Recoverable, VAT due to/from FTA, the bank account you choose, and Rounding Difference

Who

Admins prepare, lock, file, cancel and pay. Managers can read the return and its evidence

What it’s for

The steps of one VAT period, in order:

1. Register. In Settings you say your company is VAT registered, from which date, and in which Emirate. VAT is charged from that date.
2. Post your documents. Sales, purchases, expenses, credit notes and card payouts each record their VAT as they are posted.
3. Close the dates. In Settings › Lock dates, lock the dates through the end of the VAT period. This stops new entries in those dates. It is not the same as step 6.
4. Check the figures. Open Detailed Reports › Tax › VAT return. Pick the period. Clear everything under Items to resolve.
5. Prepare this return. On the Saved returns tab. This saves a record for you to check. Nothing is locked yet.
6. Lock the figures. An admin locks the return. The VAT moves into VAT due to/from FTA. The documents of the period can no longer change.
7. File with the FTA yourself. Then choose Mark as filed and record the date and your reference.
8. Record the money. Choose Record payment when you pay the FTA, or Record refund when the FTA pays you.

Locking the figures and marking as filed

These are two separate buttons. This page uses these words every time.

• Lock the figures happens inside LedgerLite. It freezes the return, moves the VAT into VAT due to/from FTA, and protects the documents of the period. It posts an entry.
• Mark as filed only records that you filed with the FTA yourself. It posts nothing. After it, the return can no longer be cancelled.

A filed return always has locked figures, but a return with locked figures may not be filed yet. The app is not always this exact. Some labels and messages say “finalised” or “filed” when you have only locked the figures. Read both as “figures locked”. The documents are protected from the moment you lock.

Registration, rates and treatments

These live in Settings › VAT rates. VAT rates covers them in full. In short:

• Registration. You choose the jurisdiction (United Arab Emirates), the registration status, the registration date (Registration effective from) and the Default Emirate of supply. The VAT number (TRN) is kept in Business details and must have 15 digits.
• From the registration date. Documents dated on or after it charge VAT, and purchases can claim VAT back. Documents dated before it carry no VAT. If you are not registered, no document carries VAT.
• Changing the date. The app shows what the change affects and asks you to confirm. Posted documents keep the VAT they were posted with. Fix any that look wrong with a correction.
• Rates and treatments. Each tax profile has a rate and a VAT treatment, which says how its sales are counted in the return. A 5% profile is Standard-rated. A 0% profile is Zero-rated, Exempt or Out of scope. A registered company cannot use a profile that has no treatment.

Example 1The same invoice before and after the registration datePrice 42.00 including VAT · invoice dated before the registration date

• Invoice total42.00
• VAT charged0.00
• Cost of the goods24.00

Account	Debit (AED)	Credit (AED)	Why
1100Accounts Receivable	42.00		The customer owes the full price
5000Cost of Goods Sold	24.00		What the goods cost you
1200Inventory		24.00	Your stock goes down
4000Sales Revenue		42.00	All of the price is income: there is no VAT
Total	66.00	66.00	Balanced

Before the registration date the price is the full price, and there is no Output Tax line. The same invoice dated on or after the registration date takes the VAT out of the price: income 40.00 and VAT 2.00, with the total still 42.00.

What the VAT return shows

The screen has four tabs. Review is the first.

Tab	What it shows
Review	The three totals (Output VAT, Recoverable input VAT, Net VAT due), whether the return is ready, Items to resolve, Tax-point timing, and VAT accounts (the tax evidence compared with the VAT accounts in your books)
Tax treatments	The amounts behind the totals: Standard-rated for each Emirate, Zero-rated, Exempt, Out of scope, Input VAT and Non-recoverable input VAT
Source evidence	Every document in the period, with its tax, taxable amount, VAT and status. You can open the document
Saved returns	Your prepared, locked, filed and cancelled returns, and their payments

Net VAT due is Output VAT minus recoverable input VAT. For example, output VAT of 10.00 and recoverable input VAT of 5.00 give a net VAT due of 5.00. A negative figure is a refund due to you.

The screen’s own note says these are the figures for your VAT return, not the FTA’s VAT201 form. Out of scope and Exempt sales are listed with their amounts but add no VAT. Non-recoverable input VAT is VAT you chose not to claim back. It is left out of recoverable input VAT.

Which period and which date

• The period. Use the Reporting period selector at the top of the report: This month, Last month, This quarter, Last quarter, This year, Last year, or Custom with From and To, then Apply period. The return covers exactly that period.
• The filing due date. The Filing due date field starts at the 28th of the month after the period ends. Change it to the date the FTA gave you, then choose Refresh VAT return.
• Which date counts. A document is counted in the period of its tax point, the date the VAT counts from. This is not always the day it was entered. If the two differ, the app lists the document under Tax-point timing and shows “Tax point ‹date›, booked ‹date›”. The warning does not stop you.

Document	Its tax point
Sales invoice	The invoice date
Sales delivery	The delivery date. An invoice made from a delivery adds no second VAT
Till sale	The sale date
Customer credit note	The credit note date. It takes VAT off the return of that date
Purchase	The supplier invoice date

For expenses, expense bills and card payouts, see Expense bills and Card payouts. A card payout counts its fee VAT on the payout date.

Fields

The VAT return screen

Field	What it means	What it changes
Reporting period	The tax period, chosen above the report	Which documents are counted
Filing due date	When the return is due. Cannot be before the end of the period	Shown on the return and used for the reminder on the Overview
Show (Source evidence tab)	All items, Classified automatically, Tax-point timing differences or Not classified	What the list shows. No accounting effect

Mark as filed

Field	What it means	What it changes
Filed on	The day you filed with the FTA. After the end of the period, and not after today	Saved as the filing date
Filing reference	The FTA’s reference. Up to 120 characters	Saved with the return

Cancel return

Field	What it means	What it changes
Cancellation reason	Why. Up to 500 characters	Kept in the history
Tick box	You want to cancel, and the reason is right	Needed before Cancel return works

Record payment and Record refund

Field	What it means	What it changes
Date paid or Date received	The day the money moved. From the day you locked the figures up to today	The date of the journal entry
Bank account	An active bank account. Cash drawers are not offered	The bank account that goes down (payment) or up (refund). If you have only one, it is chosen for you
Amount (AED)	Up to the amount still due, with at most 2 decimals. It starts at the whole amount due. Enter less to pay or receive in parts	How much of the VAT is cleared
Reference (optional)	Your bank or FTA reference. Up to 120 characters	Printed in the list of payments
Tick box	You checked the date, the bank account and the amount	Needed before the button works

Buttons

Button	When you see it	What happens	Accounts
Refresh VAT return	Always	Reads the figures again for the period and due date	No change
Prepare this return	Saved returns tab, for the period you reviewed	Saves a return record for you to check	No change
Lock the figures	A prepared return, admins only	Locks the figures. Asks you to tick a box first	Posts
Mark as filed	A return with locked figures, admins only	Records that you filed with the FTA yourself	No change
Cancel return	A prepared return, or a return with locked figures that is not yet marked as filed and has no payment or refund. Admins only	Cancels it. Asks for a reason and a tick	Reverses the lock
Record payment	VAT is due to the FTA, admins only	Opens the payment form	Posts
Record refund	A refund is due from the FTA, admins only	Opens the refund form	Posts
Complete CSV, PDF summary, CSV part	A locked or filed return	Downloads the frozen evidence of the period	No change

Statuses you will see: Prepared, Figures locked, Filed and Cancelled. Under Review the same return shows as Ready for review, Review required, Finalised (figures locked) or Filed. Under VAT due to/from FTA you see one line: VAT due to FTA, Refund due from FTA, Paid in full, Refund received in full or Nothing is due to or from the FTA.

Note

Filing is something you do outside LedgerLite. Mark as filed only records the date and reference. It posts nothing, but after it the return can no longer be cancelled.

What gets posted

Prepare this return and Mark as filed post nothing. Lock the figures, Cancel return, Record payment and Record refund each post one journal entry.

Locking the figures

Locking clears the period’s Output Tax Payable and Input Tax Recoverable. The net goes to VAT due to/from FTA: a credit when VAT is payable, a debit when a refund is due. The entry is dated today (your company’s date), not the end of the period. It uses the figures frozen at the moment you lock. If the period has no VAT to clear, locking posts no entry at all.

Example 2Locking the figures when you owe the FTAOutput VAT 11.50 · no recoverable input VAT

• Output VAT of the period11.50
• Net VAT due11.50

Account	Debit (AED)	Credit (AED)	Why
2100Output Tax Payable	11.50		The VAT you collected is cleared from this account
2110VAT due to/from FTA		11.50	What you now owe the FTA, held in one place
Total	11.50	11.50	Balanced

When the period also has recoverable input VAT, the same entry has a third line: a credit to Input Tax Recoverable for that VAT. The net on VAT due to/from FTA is then output VAT minus input VAT.

Example 3Locking the figures when the FTA owes youA credit note took 2.50 of VAT off the period

• Output VAT of the period−2.50
• Net VAT due−2.50 (a refund)

Account	Debit (AED)	Credit (AED)	Why
2110VAT due to/from FTA	2.50		The FTA owes you this
2100Output Tax Payable		2.50	The negative output VAT is cleared
Total	2.50	2.50	Balanced

Other periods are not touched. With 11.50 owed for one period and 2.50 coming back for another, VAT due to/from FTA holds 9.00 until you settle each return.

Paying the FTA and receiving a refund

The entry is dated the day you enter. It cannot be before the day you locked the figures, or after today.

Example 4Paying the whole VAT dueDate paid: any day from the lock to today

• VAT due to the FTA11.50
• Amount paid11.50

Account	Debit (AED)	Credit (AED)	Why
2110VAT due to/from FTA	11.50		You no longer owe the FTA
1020Bank Accounts (the account you choose)		11.50	The money left your bank
Total	11.50	11.50	Balanced

The reference you type is saved with the payment. Because the whole 11.50 is paid, the return shows Paid in full.

You may pay in parts. For example, pay 5.00 first and 6.50 later. Each part posts the same two lines for its own amount. You cannot pay more than is still due.

Example 5Receiving part of a refundRefund due 2.50 · received 1.00

• Refund due from the FTA2.50
• Received so far1.00

Account	Debit (AED)	Credit (AED)	Why
1020Bank Accounts (the account you choose)	1.00		The money reached your bank
2110VAT due to/from FTA		1.00	The refund still due falls to 1.50
Total	1.00	1.00	Balanced

A return that owes VAT takes only payments. A return that is owed a refund takes only refunds.

Cancelling a return with locked figures

Example 6Cancelling locked figures that nothing was paid againstDated today · the exact opposite of the lock

Account	Debit (AED)	Credit (AED)	Why
2110VAT due to/from FTA	11.50		The amount owed to the FTA is taken back
2100Output Tax Payable		11.50	The VAT returns to the account it came from
Total	11.50	11.50	Balanced

The cancelled return keeps its frozen evidence as history. The period can then be prepared again.

Small amounts

Documents posted by older versions of LedgerLite can hold a fraction of a fil, for example VAT of 4.9995. A bank only moves whole fils. So you pay or receive 5.00, and the last payment that clears the return posts the small difference to Rounding Difference. A part payment never posts a difference. The form tells you when this happens.

Where it shows up

Place	What changes
Balance sheet	At the lock, Output Tax Payable and Input Tax Recoverable fall by the period’s VAT and VAT due to/from FTA holds the net. A payment or refund then brings it to zero
Bank accounts and reconciliation	A payment lowers the bank account on its date. A refund raises it
Day book	Three types: VAT return (a lock or a cancel), VAT paid to the FTA and VAT refunded by the FTA
Account ledger	The lines of VAT due to/from FTA, described as “VAT paid to the FTA” and “VAT refunded by the FTA”
Overview	A “VAT return” reminder under “Needs attention” when the next return is due within 14 days or is overdue. It starts once you have filed one return
Documents of the period	After the lock they can no longer be changed or deleted
Lock dates	You cannot unlock dates up to the end of a VAT period whose figures are locked

VAT due to/from FTA always equals what your returns with locked figures still owe the FTA: their net VAT, less payments, plus refunds.

What the app blocks

Each refusal saves nothing. The message names the field to correct where it can.

Preparing a return

Situation	What you see
Not registered for UAE VAT	Set up registered UAE VAT before creating a return.
A return already covers part of the period	A VAT return already covers this period. Review it before creating another one.
Start date after the end date	VAT return start date cannot be after the end date.
Due date before the end date	VAT return due date cannot be before the end date.
Days left out between two returns	A warning only: “No VAT return covers ‹date› to ‹date› (‹n› days).” The VAT of those days would not be in any return

Locking the figures

Situation	What you see
The period is not closed	Close the accounting period through the VAT return end date. under Review, or Close the books through this period and resolve VAT exceptions first. when you try
A document has no VAT class	Some tax events in this period are not classified, or were set aside by a registration date that has since moved. The VAT return lists each with its reason. Correct those documents, then finalise.
One journal has VAT in two periods	One or more journals carry VAT with tax points in more than one VAT period, so this return cannot be finalised. Open each journal listed on the VAT return to find its source document, and ask your accountant how to correct it.
The VAT evidence does not match the VAT accounts	VAT evidence does not reconcile to the protected tax control accounts.
Old VAT journals with no evidence	Tax-control journals through this return date have no tax evidence. Review the working-paper journal references with your accountant before finalising.
Today is in a locked period	Today is inside the accounting period that is locked through ‹date›, so the VAT cannot be moved in the books today. Ask an administrator to reopen the period so that today is open (it only has to stay closed through the end of this return), then try again.
Someone changed the return	This VAT return changed. Reload it before trying again.

Marking as filed and cancelling

Situation	What you see
No filing reference	Enter the filing reference.
No filing date	Enter the VAT return filing date.
Filing date on or before the end of the period, or after today	Use a filing date after the return period and no later than today.
Figures not locked yet	Finalize the VAT return before recording its filing.
No cancellation reason	Enter a cancellation reason.
Cancelling when a payment or refund is recorded	VAT payments or refunds are recorded against this return, so it cannot be cancelled. Correct it in a later period instead.

Recording a payment or refund

Situation	What you see
No amount	Enter the amount.
More than 2 decimals	Enter an amount with up to 2 decimals, such as 2.50.
Zero	Enter an amount greater than zero.
More than is due	The amount is more than the VAT still due to the FTA (1.50). or The amount is more than the refund still due (1.50).
Nothing left to pay or receive	No VAT is due to the FTA on this return. or No refund is due from the FTA on this return.
No bank account chosen	Choose the bank account.
Bank account not active	Choose an active bank account.
No bank account exists	There is no active bank account. Add one under Banking first.
Date missing	Enter the date the payment was made. or Enter the date the refund was received.
Date after today	Choose today or an earlier date in the company time zone.
Date before the lock	The date cannot be before the return was finalised on ‹date›.
Date in a locked period	The accounting period is locked through ‹date›. Choose a later date, or ask an administrator to reopen the period.
Bank account already reconciled through that date	A bank account in this journal is reconciled through ‹date›. Undo that reconciliation first.
The payment would take the bank below zero	This would take ‹account› below zero on ‹date› (balance then ‹currency› ‹amount›). Record at least ‹amount› coming in on or before ‹day› first, then save again.
The tick box is empty	Confirm before continuing.
Reference too long	Use 120 characters or fewer.
An answer did not come back	The payment may have been saved. Check status to find out, and do not record it again. Use Check status. It sends the same request once more and never pays twice
A return locked before payments could be recorded	The screen says so and offers no payment or refund

For the bank balance rule, see Bank accounts.

Documents in a locked period

Situation	What you see
Changing or deleting a document that is in the return	This is in your filed VAT return for ‹date› to ‹date›, so it can’t be changed or deleted. Correct or cancel it with an entry dated today. The correction goes into your next VAT return. Administrators can do this, and managers whose role allows it. On an invoice it adds “Create a credit note, or”
Posting a new document with a tax point in the period	This tax point is in a finalised VAT return. Record a later-period correction.
Unlocking the dates of a locked period	Not saved: A finalized VAT return prevents reopening this accounting period
Claiming VAT back before the registration date	Input VAT can only be recovered on or after the date the company was VAT registered (‹date›). Choose Non-recoverable VAT, or use a date on or after ‹date›.
A VAT rate with no UAE treatment	Add an effective UAE VAT treatment for each item tax profile before posting. on sales, or Add an effective UAE VAT treatment for each tax profile before posting. on purchases and expenses

These messages say “filed” or “finalised” even when you have only locked the figures. See Locking the figures and marking as filed.

Who can do it

Action	Admin	Manager	Cashier
See the VAT return, saved returns and frozen evidence (screen, CSV, PDF)	Yes	Yes	No
Prepare, lock, mark as filed, cancel	Yes	No	No
Record a payment or a refund	Yes	No	No
Change VAT registration, VAT rates and treatments	Yes	No	No

These are the standard roles. Your administrator can give a custom role each action separately in Settings › Users & access. Paying and being refunded are two separate rights. Someone can be allowed one and not the other.

Fixing a mistake

1. The return is only Prepared, and a figure is wrong. A prepared return holds no frozen figures. Correct the documents (an admin may first need to reopen the dates in Settings › Lock dates), then choose Refresh VAT return to see the new figures. The figures are fixed only when you Lock the figures. If the period itself is wrong, an admin uses Cancel return, with a reason, and prepares a new one. A prepared return cannot be edited.
2. The figures are locked, nothing is paid, it is not marked as filed, and something is wrong. An admin uses Cancel return. The VAT moves back, dated today, and the documents can be corrected. Prepare the period again afterwards. Today must not be in a locked period.
3. The return is marked as filed, or a payment or refund is recorded. It cannot be cancelled. Put the mistake right in a later period, with an entry dated today that goes into your next VAT return. For a sale, make a credit note. See Credit notes and Sales invoices. For a purchase or an expense, see Purchases and Expense bills. Take tax advice on any change that needs filing.
4. A late document belongs to a VAT period whose figures are locked. You cannot post it there. Date it in the open period.
5. VAT was charged or missed because of the registration date. Change the date in Settings › VAT rates. Read the list of what it affects, then confirm. Posted documents keep their VAT, so correct each one that is wrong. Documents with VAT while not registered lists the documents that carry VAT on a date before the registration.
6. VAT on a card fee is wrong. See Card payouts. A card payout counts its fee VAT as input VAT on the payout date.
7. A payment or refund has the wrong date, bank account or amount. A recorded payment or refund cannot be changed or removed on this screen. Check the form before you choose Record payment or Record refund. If it is already recorded, ask your accountant.