Cash Payments and VAT

[oggieben1956]

Hi,
If I receive a cash payment for work done but need to enter VAT in ledgers which is not included in the cash, what is the best way to do this.
It is straightforward for payment on credit as the VAT amount will have been on the invoice and the total amount will include VAT.

[Nilesh Mandvia]

Hi,
If I receive a cash payment for work done but need to enter VAT in ledgers which is not included in the cash, what is the best way to do this.
It is straightforward for payment on credit as the VAT amount will have been on the invoice and the total amount will include VAT.

The cash you received is vat inclusive. For example if you receive £115.00, £100 is for the work done i.e. sales/ fees and £15.00 is vat amount.

Journal would looklike

Cash/bank £115
Credit Sales £100
Credit Vat control account £15

HTH

[oggieben1956]

Thanks Nilesh, I will take that forwards.