Annual VAT return B2B goods sales to EU problem

[jwf]

It’s time for us to do our annual VAT return. Some of our sales for this period are before 1st Jan 2021. Back then we were using reverse charge for intracommunity transfers of goods to EU VAT registered customers in other EU countries and filling in EC sales lists. Looking back at those invoices, QF has now labelled them ‘Reverse Charge (S.55A VATA 94 applies)’, which is not quite correct as that is the domestic reverse charging as I understand it. However, more importantly, it would appear the sales on those invoices are now being excluded from Box 6 and Box 8 on QF’s VAT return function.

The wording for the boxes effectively changed on 1st Jan as noted in:

VAT Updates - January 2021

With the end of the Brexit transition agreement we have introduced a number of VAT related updates to help you manage the changes. Firstly we’ve consolidated several different VAT provisions for your invoices under a new section that you will find in the purchase and sales invoice editor. [image] Postponed VAT accounting On the 1st January a new postponed VAT accounting system was introduced for those importing goods from the European Union. Rather than paying the VAT upfront at the point of …

The only mention I can see of a period that spans both box descriptions was Glenn on 3rd Jan:

Reverse charge for services in Quickfile

Technically if you have someone on annual accounting with a period of account running from December to November then there could be a return involving EU dispatches/acquisitions right up to the end of January 2022…

Is there any other option open to us other than to manually calculate the figures and attempt to change the values in the return before submission (despite MTD rules of no manual tinkling)?

Please can anybody point me to guidance on the correct procedure to sort this out either from HMRC or from QF?

[Glenn]

On the 8th April HMRC changed the wording on the VAT return. Box 8 was reworded to narrow the scope from EC supplies to supplies that are made under the Northern Ireland protocol.

It is our understanding that any EC supplies made pre January 2021 should still be included in box 8. From 8th April our system does not automatically detect this and a manual adjustment to box 8 (along with box 2 and 9 where applicable) will be needed for those supplies and acquisitions that occured before 1st January.

If you need any help isolating these please drop a PM to @QFSupport and we will be glad to assist you.

[jwf]

Thank you for the help, Glenn. That is what I was expecting. Box 6 is also not including them. Is that as you would expect?

We do cash accounting, so should be able to just take the figures out of QF by looking at the list of payments up to 1st Jan and identifying those that are EU intracommunity transfers. For cash accounting set in QF, will QF VAT boxes automatically include payments after 1st Jan regarding invoices raised before 1st Jan? If not, we shall have to manually include payments for all the invoices raised in the period, too. I guess I shall have to check. All a bunch of arse, really. It does not affect how much VAT we owe, just some bean counter’s UK import/export figures which are no doubt utterly wrong anyway like most other government stats.

[Glenn]

As long as the payments reside in the period your reporting on, they should feature in box 6 at least. We’re happy to take a look for you if you want to send a private message to @QFSupport with your account number?

[jwf]

Thanks, Glenn. I have done that now.

[ian_roberts]

@jwf

We do cash accounting, so should be able to just take the figures out of QF by looking at the list of payments up to 1st Jan and identifying those that are EU intracommunity transfers.

Sadly it’s not that simple as EU dispatches and acquisitions always had to be reported on accrual basis even if the rest of your return is cash based.

[jwf]

Ah, yes, thanks for the reminder, Ian. QF will list us the invoices for the period. We had no EU acquisitions.

Edit. Corrections made manually. Return submitted. No need to reply to the support message I sent a few days ago. Hopefully, the issue will never arise again.