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What is VAT and how does it work? What VAT records must a business keep? What is the VAT account (VAT control account)? What are the main VAT rates? When must a business register for VAT? How is VAT recorded on a sales invoice in the books? How is VAT recorded on a purchase invoice in the books? How long must VAT records be retained and in what form? What is the difference between zero-rated and exempt supplies? What information must a valid VAT invoice contain?
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Bookkeeping › VAT Records

What is the difference between input VAT and output VAT?

Beginner

Answer

Output VAT is the VAT a business charges on its sales (owed to the tax authority). Input VAT is the VAT a business pays on its purchases and expenses (reclaimable from the authority). The VAT return reports both, and the business pays or reclaims the net difference.
Output VAT (on sales) - Input VAT (on purchases) = VAT payable/(reclaimable).
Real-world example The VAT account collects output VAT as a credit and input VAT as a debit; the balance is what's owed.

Common follow-ups: Which is reclaimable? | How is the net figure determined?

Books of Prime Entry Control Accounts VAT Records
All 25 VAT Records questions