VAT

Hi @buzz6 

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@buzz6 wrote:

We have recently starting importing goods from China and would like to check we are entering the data properly

So for entering the bill for the purchase of the goods should I select No VAT from the Amounts are or select Exclusive of TAX. If I select No VAT I assume that this doesn't then add the purchase on the VAT return.

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Personally, I wouldn't use NoVAT because it doesn't post the amount to the VAT Return.  Strictly, it's probably correct (Outside the Scope) but I like to have VAT report totals matching sales/purchases totals from other reports.

I have an Import/Export VAT Code set up for this but it does the same as the Exempt or Z=0% codes.

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@buzz6 wrote:

Once we get the goods we receive a bill for the duty from Fedex and as we are VAT registered we can claim the VAT back. So in the bill I would enter :-
Amounts Are box Exclusive of TAX
Category details  -
one line for the duty with 0% Z

another line handling fee 20% S (there is VAT charged on this)
under the subtotal at the bottom would enter the amount of the VAT that we are charged on the goods (as I said we are VAT registered and can claim this back)

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Again, this does the job but I prefer never to adjust the Subtotal/VAT unless absolutely necessary.  If someone's reviewing later (think VATman), it's difficult to see what's been done & why.

My preference is to add two lines to create the Import VAT:

Line (1) an amount equal to 5xVAT (so that using S20% code gives the correct VAT)

Line (2) minus the same amount with Z=0% code, so that just the VAT remains.

Hope this helps.

Hi Paul72

Thanks for your help, it gives me confidence that what I was thinking is along the right lines.

I did think using the Exempt or Z would be the best option as you say it then posts to the VAT return.
In the Duty bill I was going to put in the description the invoice / Waybill number of the purchase it relates to so that this could be tied together but will definitely look at you suggestion. 

Thanks