The reconciliation depends on which VAT scheme you use, so we will look at each one in turn.
Standard invoice based accounting scheme
The balance on your VAT control account at the end of the VAT period should be the same as the balance to be paid or refunded on your VAT return.
You can claim inputs dated within the VAT quarter so you may wish to claim these from late arriving invoices that were too late to be included in the return. This will be an element of the reconciliation for the current quarter and the next, as they will be included in the VAT return but will have been claimed on the previous.
If you have differences which need to be investigated run the input/output report and compare that to the transaction listing – maybe there is a misdated transaction or a VAT coding error.
Cash based accounting scheme
The basis of this return is VATable items, cash book receipts and payments that are matched in the VAT period, with the exception of purchases from the EC which are to be included as if they were in the standard invoicing scheme i.e. dated in the VAT quarter. Note that these do not affect the VAT amount of the return. Cash received or paid not allocated to customers or suppliers (unallocated cash) is also included.
To reconcile the balance, identify the VAT element of sales and purchase invoices still outstanding or partially outstanding at the end of the VAT period (i.e. not yet matched) (aged Debtor and Aged Creditor reports in Prelude give this) + the balance on the VAT return. Note that you will need to adjust for VAT included in Unallocated Cash.
Check for differences in the same way as the invoicing scheme.
Flat rate scheme
This scheme is based on a flat rate percentage being applied to the outputs including VAT whereas the invoices are raised at the standard rate. Inputs (with exceptions) are ignored for the VAT return.
Differences to be reconciled may be because of inputs wrongly coded but the differences due to the scheme operation will be written off to profit by the software, and should be clear. Check for differences in the same way as the invoicing scheme.
Providing transactions are coded correctly the balance at the end of the VAT period should agree to the VAT control account. Separate VAT codes are recommended for margin elements and non-margin elements. Check for differences in the same way as the invoicing scheme.
When required these will be included.
Should have no impact on the reconciliation, but be aware of them.