Sales Tax/Vat refund from Government

[John Whitmore]

On Sat, Feb 04, 2017 at 04:17:08PM +1100, Liz wrote:
> On Fri, 3 Feb 2017 13:40:23 +0000
> John Whitmore <arigead at gmail.com> wrote:
> 
> > He saw that I had an Income account for Vat refunds and said that
> > that was wrong as I'd get taxed on an Income and it's not. He said
> > that the refund from Government should go into the Liabilities:VAT
> > account, which I think is totally wrong as well. 
> 
> Lots of things that accountants do seem strange!

Have you sen the movie? ;-)

I think I have it in my head now. I am using a single Liability:VAT account
but think I'll stick with that. Somebody else suggested splitting into two sub
accounts, but I'll stick which what I've got for the moment.

It just felt strange to get money into my current account and have it increase
my liabilities. I'll get over it.

> 
> A VAT refund isn't income at all.
> You paid that money out, and the tax collector (whatever acronym) has
> to pay it back.
> So its an asset.
> 
> However, the accountant wants it in Liabilities, as a "contra account".
> The accountant has to fix up any of your mistakes, so I suggest
> following her advice carefully - its cheaper in the long run.
> 
> Liz
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