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dawntraynorbooks
Aug 18, 2021 3:48 PM UTC
Solved

I have set reverse charge vat in quickbooks, however it is showing on my VAT report that I am both claiming the VAT and paying it. How do I correct this?

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GeorgiaCAnswer
Apr 26, 2022 1:58 PM UTC

Hi gcj1971, thanks for joining this thread - can we check which specific VAT code you're using? The RC codes when used on purchase forms work by posting the VAT amount to box 1 and box 4, which cancel each other out with a net impact of zero on your return - if you're happy to share any screenshots on this thread, that would also be helpful. 🙂

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4 replies

ChristieAnn 11
Aug 18, 2021 9:08 PM UTC

Hi there, dawntraynorbooks.

 

Welcome to the QuickBooks Community. I'll be sharing some details on how the reverse charge works in the QuickBooks system. Then, to ensure that you're able to correct the details shown on the report.

 

Once you purchase goods from another business that is registered for VAT in an EC Member State, you shouldn't be charged VAT if you give the supplier your VAT registration number. The supplier will charge you under the reverse charge mechanism and you can account for the VAT at the rate applicable in your country. If you ship goods to a customer in an EC Member State, you should not charge VAT if your customer supplied a valid VAT registration number. You can check the VAT number at the European Commission website. You then charge your customer under the reverse charge mechanism.

 

To see additional information, you can click this article: QuickBooks VAT codes. This also provides information about the domestic reverse charge.

 

The VAT report will automatically run on the basis you have chosen in your VAT Settings or the entries being entered in the system. I suggest running the VAT Detail report to get the list of transactions that are included in each box on the VAT return. With this, you're able to view the breakdown of your VAT sales and purchases by the codes. This is to investigate the reason why you're both claiming the VAT and paying for this and to correct it so we're able to fix it.

 

Additionally, the businesses on the Flat Rate Scheme (FRS) pay a fixed amount of VAT to HM Revenue and Customs (HMRC). Then, keep the difference between what customers are charged and the VAT the business pays on its own purchases. To turn on FRS or make adjustments in QuickBooks, you can click this article to see details on how to perform the process: QuickBooks Online Flat Rate Scheme explained.

 

I'm also adding this article to see what specific report to pull up that shows you the summary information on the VAT return: VAT 100 Report. This will help you as you file your return to complete and submit your return to your VAT agency.

 

Stay in touch with me if there's anything else you need on how VAT works in QBO by commenting below. I'm always around to help with your VAT concern in QuickBooks.

gcj1971
Apr 26, 2022 9:43 AM UTC

I don't seem to be getting any further in my request for help on an other thread. I have a supplier who applies RC VAT to the bills he sends me, so I don't pay VAT when paying their bill. I enter the bills on QB online and his bills are showing in the VAT detail report and reclaiming the VAT. No one seems to be able to help me and just told me to contact my accountant or HMRC. I sent the VAT detail report to my accountant, and she said the error is with Quickbooks. She said I need someone from QB to connect to me remotely to find out what is causing the problem. I have been assured by other QB help that I am applying the correct RC charge when inputting their bill for payment, so don't know what else to do. I need to submit my VAT return asap, and this problem is holding me up. I am going to try and adjust the reclaim figure to take out the VAT that is showing to reclaim from this company. But will have to check previous vat returns to see if it has reclaimed on VAT detail report. If it has then I am going to have to repay this VAT to HMRC. I am really concerned about this issue. Can someone call me and help?

GeorgiaCAnswer
Apr 26, 2022 1:58 PM UTC

Hi gcj1971, thanks for joining this thread - can we check which specific VAT code you're using? The RC codes when used on purchase forms work by posting the VAT amount to box 1 and box 4, which cancel each other out with a net impact of zero on your return - if you're happy to share any screenshots on this thread, that would also be helpful. 🙂

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