VAT Rate Questions

Welcome back to the QuickBooks Community, user261022. Let me discuss how the list of VAT works. Then, ensure you can utilize the correct code to manage your return to make sure that the data stays accurate.

When you add your VAT number to QuickBooks, this will allow you to track VAT from customers. Also, assign VAT categories to products and services, check how much tax you owe and submit returns to HMRC.

Then, the 20.0% RC SG - Standard reverse charge VAT for services you've mentioned is used for goods and services bought in another EU country but is classed at the standard rate in the UK. Also, yes you're correct that VAT at 20% is dropped in Box 1 and 4 and Net Purchase to Box 6 and 7. 

I recommend contacting HRMC support to further assist you in handling VAT and what code you should be using. Also, to confirm if you can offset it against the output VAT.

On the other hand, you can also use the No VAT - Out of scope of VAT. This is charged on goods or services that are exempt from VAT or are outside the scope of the UK VAT system. These transactions will not show on your VAT returns. No VAT applies in the following situations:

• Anything you sell or supply when you’re not registered for VAT/or don’t need to be registered for VAT
• Goods or services bought or sold outside of the EU
• Goods or services bought or sold for personal use
• Goods or services bought or sold but not as part of your business 
• Statutory fees and services, like MOT testing 
• Transport tolls for bridges, tunnels, and roads
• Welfare services provided by charities
• Charity Donations 

 You can open this article to see further details and a list of common VAT: VAT codes in QuickBooks Online: A complete guide.

Lastly, you may refer to this article to view various information on how to adjust the amounts on a return: VAT exceptions and reports in QuickBooks Online.

Let me know the result after following the details above. I'll be right here if you need further assistance with your VAT or any QuickBooks-related concern. Have a nice day!

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Hi @user261022 

@user261022 wrote:

I am looking for some help with our first VAT return in the UK. We use Quickbooks but there are some scenarios we aren't sure about.

(1) Once we added our VAT number, we do not pay VAT on our Amazon or Stripe fees. My understanding is that we should be using 20.0% RC SG (Reverse Charge Services 20%) tax rate in Quickbooks. However, this is causing the Vat amount to appear in Box 4 "VAT reclaimed in the period on purchases and other inputs (including acquisitions in Northern Ireland from EU member states)".

Is this correct as since I never paid this input VAT not sure if we can offset it against output VAT?

Yes - that's correct.

If you look carefully at Box 1, the same amount will have been added by QBO - effectively cancelling out the amount in Box 4.

It's an accounting thing - you aren't paying the RCSG VAT - you're paying & reclaiming at the same time - so you have to account for it on both sides of the VAT Return.

@user261022 wrote:

(2) We sell on Amazon using Fulfillment by Amazon. All stock is stored in the UK, and when we sell on Amazon to Ireland, Amazon deduct the UK VAT, charge Irish VAT (23%) and pay us ex VAT. What VAT rate should we be applying to these transactions? Is it 20% ECG EC Goods Standard?

A bit trickier but don't use ECG VAT codes as they are no longer relevant in GB (no-one seems to have told QBO Support though!).

This one is probably a question for Amazon support.  It depends on whether you or they are considered the seller in Ireland (I don't know how that bit works).

If you are (technically) selling to Amazon in the UK & they're doing the export then you should be applying UK VAT (20%).  However, it doesn't sound like that's the case.

It sounds like you are considered to be the seller in Ireland - in which case you should be VAT Registered in Ireland (but maybe that's the service that Amazon is providing?).  In which case, as far as HMRC are concerned, you are the Exporter & you should apply Exempt VAT Code (or Z=0% which has the same effect on the VAT return) or create your own custom code if you prefer.

Do not use NOVAT Code as this code will not record to the VAT Return.

Unfortunately, no-one has told QBO Support about this either!
Exports & Imports are not Out-of-Scope and both should be recorded on the VAT Return ... Read Section 3.7 & 3.8 (Filling in Boxes 6&7)

Hope this helps.