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HMRC internal manual

VAT Accounting Manual

HM Revenue & Customs
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Accounting for VAT: negative amounts on VAT returns

Negative values or amounts of VAT to be shown on returns can arise in the following circumstances:

  • where credits allowed to customers exceed sales;
  • where credits received from suppliers exceed purchases;
  • where a business operating certain retail schemes have made unusually large purchases of zero-rated goods; or
  • where adjustments are made under the capital goods scheme.

The computer cannot recognise negative amounts on tax returns.

You should advise any fully taxable business that is declaring negative figure(s) on their online return to insert a minus sign before the relevant figure, for example -1000.00.

Businesses that are submitting paper returns should put the figure in brackets, for example (1000.00).