Output VAT
Output VAT is VAT a registered business must account for on taxable supplies it makes, according to the applicable rate, tax point and other rules. It is included in the VAT return and normally offset against allowable input tax, subject to applicable schemes and adjustments. Zero-rated supplies are taxable but generate output VAT at zero.
Worked example
A registered business makes a taxable sale and calculates 200 output VAT using the applicable rate for the transaction and tax period. It includes that amount in its VAT return, subject to applicable adjustments.
Common mistake
Assuming VAT collected can be treated as business revenue or applying an undated rate.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Supporting | June 2026–June 2027 |