Which boxes are used to calculate the net VAT to be paid or reclaimed?

To calculate the net VAT to be paid or reclaimed, the key components are Box 4 and Box 5. Box 4 reflects the total amount of input tax that can be reclaimed, which includes VAT on purchases and expenses that are reclaimable. Box 5, on the other hand, indicates the total VAT due on sales, which includes VAT collected from customers.

To find the net VAT position, you subtract the reclaimable input tax recorded in Box 4 from the total output tax recorded in Box 5. The result will show either the amount to be paid to HMRC if Box 5 is greater or the amount to be reclaimed if Box 4 exceeds Box 5. This makes Boxes 4 and 5 essential for determining the net VAT status accurately.

The other combinations do not encompass both necessary elements required for this calculation, leading to an incomplete assessment of the VAT position. Therefore, focusing on Box 4 (input tax reclaimable) and Box 5 (output tax due) is crucial to achieving the correct net VAT outcome.