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Anonymous
May 30, 2021
Question

Reverse charges for digital purchases form outside UK

  • May 30, 2021
  • 1 reply
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Hi, I'm looking for guidance for entering invoices for digital services bought outside UK where VAT is not charged, like Dropbox, Shopify and others. I understand that VAT must be paid and also reclaimed through a reverse charge procedure.

 

When I tried using the RC VAT code it behaved strangely. Say the invoice was for £100 for cloud services, so I'd have to account for £20 VAT as due and then reclaim. However, on the VAT 100 report in QB, it showed the whole £100 as the due tax which is wrong. When I then made a notional sale for £120 to reclaim the VAT, I'm only reclaiming £20. So something seems wrong.. 

 

Is there any guidance or example for this?

 

Thanks

1 reply

RenjolynC
RenjolynC
May 30, 2021

Good day, legalnumbers.

 

If you're using QuickBooks Online, the data that shows on your VAT 100 return will depend on what RC VAT rate you've selected. You can find the codes here and how it will be reported on your  VAT 100 return: Common VAT codes.

 

For QuickBooks Desktop, check out these links:

 

Please let me know if you need any follow-up questions. I'll be around to answer them. Take care!

 

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