I have tried to create an invoice for eBay fees and tag it to a client I called eBay, that is shown as being in Luxemburg. On the VAT return it shows the gross fees in box 9 (Total value of acquisitions from other EC states exc VAT), box 7 (Total value of purchases exc VAT), box 2 (VAT due on EC aquisitions) and box 4 (VAT reclaimed on purchases and other inputs). The issue is that box 2, 8 & 9 are for GOODS only and not services like eBay fees. It appears it populates box 2 instead of box 1 and box 9 instead of box 7.
Here are the guidelines for this.
The rules are re-stated in Notice 741A Section 18.3.
You should then include in the following boxes of your VAT return:
the amount of output tax in box 1 VAT due on sales
the amount of input tax in box 4 VAT reclaimed on purchases
the full value of the supply in box 6 total value of sales
the full value of the supply in box 7 total value of purchases
Please note that the value of supplies/acquisitions of services must not be included in boxes 8 and 9 of your VAT return.
Read more at http://www.taxationweb.co.uk/forum/reverse-charge-vat-return-adjustments-t29274.html#w5iHBDMf2rC5mXVs.99
Has QF got this all wrong or what. Why does it assume the invoice is for goods and not services?
What are the implications of submitting your return with the wrong boxes filled in because of such an issue?
I am struggling with the same question. I had a look at some posts where reverse charge is taken care of in the invoices, however this puts the amounts in Box 2 & method is geared towards purchases of goods. For services I cannot find any automated method & only way out seems manual adjustments of VAT returns. With increasing service providers from abroad - Amazon, Ebay, Etsy, Shopify, Paypal etc…, if this process can be automated, it will be great.
If somebody has cracked a way around, please share.
Maybe Glenn will know if there is a way around this other than a manual adjustment. Hopefully something is integrated so you can select service on the invoice and it puts the VAT return figures in the correct VAT return boxes.
At the moment the EU reverse charge only supports goods not services. So any adjustment would need to be manual.
The rules around the reverse charge on services is complex and it’s difficult to develop a one-size fits all approach here. This is the advice I’ve received previously when looking at this with our accounts + dev team.
There are number of discussions around this subject on the forum, I will try to dig up the posts.
Ok Glenn, so officially manual adjustment is the only way right now to correctly account for reverse charge than?
Also just a notice there is no EU reverse charge on goods, for goods it is called Acquisition tax, the idea is the same but the word is different thought.