VAT payable

What it means

VAT payable is the outcome of a VAT return in which output tax exceeds deductible input tax. The taxable person pays the difference to the state; the opposite outcome is excess input VAT.

It is not a turnover tax, nor output tax on its own, but the balance for a whole period. One invoice therefore never shows what will be paid: what counts is the sum of every supply and every deduction claimed in the month or the quarter.

Self-assessment of VAT does not change the result. Under the reverse charge the payer reports the tax as output and, as a rule, deducts it in the same return, so both sides rise by the same amount. A VAT liability only comes from supplies on which the deduction is barred or only partial.

How it works in practice

The return is filed and the tax paid on the same deadline, within 25 days after the period ends; the VAT period is a month or a quarter. Payment goes to the taxpayer’s personal tax account, with a variable symbol encoding the period paid for.

Before filing, the figure is reconciled against the control statement and the ledger: only input VAT deduction from documents actually held in that period belongs in the return. An invoice delivered later is claimed in a later period.

Tax is due on what was invoiced, not on what was collected, unless the company uses the special cash accounting scheme. When a customer pays late, the VAT still has to be paid out of the company’s own money. When planning cash flow we therefore tell the client the expected amount before the period ends, not on the filing day.

What to watch out for

The money leaves on time but carries the previous period’s variable symbol. The payment is matched to a different liability, the current one stays in arrears, and late-payment interest runs until the taxable person asks for it to be reallocated.

The return goes in on time but the tax is not paid because the company is waiting for customers’ money. Late-payment interest runs on the arrears, once the statutory threshold is exceeded the debtor appears on the public list of tax debtors, and its tax reliability index worsens, which banks and business partners can see too.