Hello all. As a profit and loss account is prepared using net figures for sales and purchases, how does the VAT claimed back on purchases work it's way into overall profit? For example, I enter a sales figure of £1000 with cost of sales at £200. This would leave me with a profit of £800. As I have been able to claim back the £40 VAT on the cost of sales where does this figure go in my accounts? In theory I have now made a profit of £840? I do have an accountant but I'm preparing my figures for them today and can't get my head around this when compiling my figures! Thanks.