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AngusK1
November 27, 2024
Question

How to set up Domestic Reverse Charge VAT codes correctly

  • November 27, 2024
  • 1 reply
  • 0 views

Hello,

 

I need to create a new VAT code (which I'm calling 'DRC') for the Domestic Reverse Charge now that I have gone VAT registered.  Within the VAT code I have also set up two VAT items: DRC on purchases and DRC on sales.  I am stuck at the point of selecting the correct VAT return box and the correct VAT return rates for both items ... or should I be doing this through a VAT group anyway?

 

For purchases I believe I need to put the VAT component in box 1 and 4 and the net value in box 7

For sales I believe I only need put the net value in box 6

 

When selecting the boxes which a VAT item can be applied to I am only given options for 1 box or two boxes, not 3 as I will need for purchases (1, 4, 7).  Would I achieve this by setting up a VAT group which has one item handling the box 4 and 7 part and one box for the box 1 part?  If so, can somebody please give me an Idiot's Guide set of instructions?

 

Thanks in anticipation of a simple solution!

 

Regards,

 

Angus

1 reply

C
CharleneMaeF
November 27, 2024

Hi there, AngusK1.

 

To ensure the Domestic Reverse Charge VAT codes are set up correctly, we kindly request that you contact our live dedicated support team. As part of our security protocol and to ensure the protection of your account, we will need to verify your account-specific details. They're equipped with tools to check the cause. It'll also allow them to submit a ticket to our engineering team to alert them about the issue if necessary.

 

You can directly contact our Live QuickBooks Support Team using this phone number: 0808 234 5337. Our help is available from 8 AM - 7 PM, Monday through Friday. You can also message them live Monday to Friday, 8.00 AM - 10.00 PM, and Saturday & Sunday, 8.00 AM - 6.00 PM.

 

Should you have any more questions about working on your books, please don't hesitate to keep us posted. I'm here to support you and will keep this conversation open for your convenience.

A
AngusK1Author
November 27, 2024

I'd really perfer instructions within this forum, please.  It is really not convenient for me to contact Support as they do not seem to provide support for QuickBooks Desktop.  Would you be so kind as to provide the information I require here?  that way it may also help others who are also facing this probem and save duplication of effort.

 

Many thanks.

 

Angus

JenoP
JenoP
November 27, 2024

Tracking VAT for companies that operate within the construction industry can be a little tricky, Angus. Allow me to share details about tracking reverse charges in QuickBooks.

 

First, I want to inform you that as of April 2024, we've officially discontinued QuickBooks Desktop UK. This means that the software will no longer receive critical updates, including changes to important tax guidelines. This is also why our phone support teams no longer provide assistance for QuickBooks Desktop.

 

Given the current circumstances, we strongly recommend you switch over to QuickBooks Online or explore alternative accounting solutions, especially if you need to track VAT and meet MTD requirements.

 

Let me share this article for comprehensive details about the discontinuation process:  QuickBooks Desktop discontinuation support.

 

Second, two VAT codes have been added to account for the tax in relation to tracking Domestic Reverse Charges. One is 20%, and the other is 5%.

 

Once theses codes are used in a transaction, QuickBooks will automatically account for the reverse charge. The VAT amount will also be reflected on your VAT return.

 

You're also correct that purchases VAT is coded to Box 1 and Box 4, while net purchase is reported to Box 7. On the other hand, sales transactions are coded to Box 6. You can read more details about this here: VAT codes in QuickBooks Online: A complete guide.

 

Please note that while this article is categorized under QuickBooks Online (QBO), the guidance is equally applicable to QuickBooks Desktop (QBDT).

 

In addition, I would recommend reaching out to your accountant for additional advice about tracking VAT and CIS-related transactions.  

 

Allow me to give you this article for more details in case you're interested in switching to the online version: Find out how your books will move from QuickBooks Desktop to QuickBooks Online.

 

Please don't hesitate to contact us again if you need further assistance. Whether it's regarding VAT collection or recording other types of transactions in QuickBooks, we're always ready to support you.

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