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sanitix
October 5, 2021
Question

Services imported from overseas suppliers

  • October 5, 2021
  • 1 reply
  • 0 views

Hello,

 

I try to manage overseas business transactions for importing services.

As I understand invoices from supplier outside the UK are subject to the reverse charge rule and VAT should be accounted for by the customer. 20% RC reverse charge VAT tax rate should be applied for services purchased from overseas suppliers.


Should I enter only new transaction as an expense with VAT Reverse Charge or should I additionally enter the same transaction as a sale receipt with 20% VAT.

 

How to register these type transaction in QB correctly to prepare VAT return.

1 reply

JessT
JessT
October 6, 2021

Hi there, sanitix!

 

Knowing how the RC SG VAT code affects your VAT Return is the key to having an accurate record. I'll share information about it so you'll be guided with your purchases.

 

When used in an expense or a supplier transaction, the RC SG code reflects the VAT amount in Box 1 of your return. At the same time, it also puts (reverses/reclaims) the same amount in Box 4. Then, the net purchase is declared in Boxes 6 and 7. Therefore, you won't need to enter a sales receipt to reclaim the VAT anymore.

 

You can also check about QuickBooks VAT Codes. It explains how VAT Codes affect your return and when to use them.

 

If you have other questions about the taxes on your transactions, feel free to go back to this thread. I just to be sure that you feel at ease, so you can turn your focus into your business because that's what Quickbooks is for. Have a great day!

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