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skinnerneil
March 24, 2021
Question

Post Brexit VAT codes and entry

  • March 24, 2021
  • 1 reply
  • 0 views

Confused about post Brexit VAT codes and entries... QB Desktop Premier 2021. 

 

We have imported goods from USA for years - the supplier invoice is entered (in US$) with VAT code E (0%). We pay VAT and duty to air air shipper on arrival - VAT amount gets posted to box 4 . 

We claim back in VAT return. 

Net Zero.

Nice and simple. 

 

Post Brexit - I had assumed goods coming in from EU would be treated the same way - but so far we have not been presented with any VAT bills on arrival.  I assume all the importers assume we want to do the postponed VAT thing (I would rather not thanks).

I am entering my suppliers bills also as VAT code E (0%). 

So purchase value is recorded in total net purchase value on VAT return - box 7. 

But nothing in any other boxes. 

 

Now I got (2 months after it arrived) a document today from FedEx for the VAT value on one shipment from France - nothing to pay but presumably I have to account for this?

 

Seems all rather pointless... I have to put this VAT amount so its recorded in boxes 1 and 4 - so just cancels itself out... Cant I simply ignore doing this ?!! 

 

If I have to record it - how ??

1 reply

E
EmmaM
March 24, 2021

Hello Skinnerneil, What boxes are you wanting to hit? If you do not feel the post VAT accounting applies you could maybe use a reverse charge code , though that would hit boxes 1 and 4, it may be worth confirming with an accountant or HMRC for guidance on which is the best code for you to use.

S
skinnerneilAuthor
March 25, 2021

A specific example raised itself today.

 

We have a shipment of products just arrived in from France.

Supplier invoices total € 45926.04.  I have entered into QB using code E (0% VAT).

That value is entered only onto VAT box 7 on QB (converted to sterling) - total net value of purchases.

 

Our importer did the paperwork for clearance - VAT to pay was £ 7943.88.  But this value is IMMEDIATELY offset under the postponed VAT system by the same value credited back (all linked to our EORI number apparently).  So net zero VAT.  Goods arrived . Nothing to pay.

 

The official HMRC advice is here - https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat

 

That says the VAT figure should be entered into Box 1 (sales VAT) and box 4 (purchase VAT). 

Thus cancelling each other out.

 

My point is how do I enter this ?  I do not have a bill ??  Journal entry ??

E
EmmaM
March 25, 2021

Hello Skinnerneil, You could enter as either, what happens when you use the reverse code does it not show as affecting the boxes as you want? we can take a look at this in more detail if you call us on 08081682535 and we can do a screen share with you.

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