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Danzo1
Sep 28, 2022 10:13 AM UTC
Solved

0% vat /exempt / no vat

hi cant get my head around no vat / exempt /0% ??? if for example i brought books from a non vat registered place is that 0% vat or vat exempt ? any help greatly appriciated

Ashleigh1Answer
Sep 28, 2022 10:43 AM UTC

 

Hello Danzo1, 

 

Welcome to the Community page, 

 

We are unable to tell you which VAT code to use, you would need to seek advice from an accountant who will be able to help you with this. If you have a look at this article, it has more information on what each VAT code means for you. 

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4 replies

Ashleigh1Answer
Sep 28, 2022 10:43 AM UTC

 

Hello Danzo1, 

 

Welcome to the Community page, 

 

We are unable to tell you which VAT code to use, you would need to seek advice from an accountant who will be able to help you with this. If you have a look at this article, it has more information on what each VAT code means for you. 

paul72
paul72
Sep 28, 2022 11:12 AM UTC

Hi @Danzo1 

 

No VAT - will not post to VAT return, so only use for items that need to be kept off VAT100.

(I tend to use only on payroll cheques, adjusting journals, drawings, etc)

 

Z=0% & Exempt are pretty much identical in the effect they have on the VAT return.

(both post amounts to box 6/7 & £zero VAT)

The difference is technical & for most people not worth worrying about.

 

I tend to use Z=0% for everything bought/sold in the UK whether it is technically exempt or zero-rated but use Exempt code for overseas - just as a way of separating things on reports.

 

For your books, I'd use Z=0%.

Whether that's technically correct is neither here-nor-there.  For all practical purposes it works & gives the correct result - purchase posted to box 7 & £zero VAT to box 4.

 

Hope that helps.

    Bernice Cole
    Sep 28, 2022 1:06 PM UTC

    Hi there! 

     

    I use the codes as follows

     

    1) No VAT -  where the company isn't registered for VAT so VAT isn't charged on anything even it it was a VATable item

    2) Z=0% - Zero rated VAT items so items where there is no VAT charge applied such as children's clothes etc 

    3) Exempt - we have grant projects where we cannot claim the VAT back from HMRC so even if VAT is charged on these items, I have to mark it as exempt. 

     

    Hope this helps.  

    paul72
    paul72
    Sep 28, 2022 3:31 PM UTC
    @Bernice Cole  wrote:

    Hi there! 

     

    1) No VAT -  where the company isn't registered for VAT so VAT isn't charged on anything even it it was a VATable item

     

    Be careful with this - as above, NoVAT does not post at all to the VAT return (not even to box 6 & 7).

    Even though, technically, something might be outside the scope of VAT it's better to be on the return than not.

    Certainly, goods bought from non-registered suppliers should be shown on the VAT return.

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