How do I handle a VAT Only Invoice? It is a VAT invoice from the garage where the vehicle was repaired. No other part was involved with the claim. I have followed the instructions I found on the forum, (that was for import tax) but when I come to do the return it is not recognising the VAT, which is £488.00. I spoke with the VAT office, they told me to read Public Notice 701/36, this document seems to be for Insurers and not the customer. Any help would be appreciated. I did ask Santa but he said he had much more important things to do this coming week!
You can record a VAT-only invoice in QuickFile by making two lines, one for the net amount as 20% VAT and another at minus the net amount with no VAT, e.g.
- Motor expenses - repair costs following accident: £2,440 NET, 20% VAT = £488
- Motor expenses - Less: net paid by insurance: -£2,440 NET, no VAT
This gives you a purchase in QuickFile for £0 net plus £488 VAT.
When it comes to the VAT return I asked HMRC and they said I should include the net amount in box 7 even though I didn’t pay it myself, so I would make a manual adjustment to add £2440 to box 7 on the return (which doesn’t affect the VAT due so you don’t need to adjust for this anywhere else). I guess this makes sense as the main purpose of box 7 is as a cross check that you’re not trying to claim more than 20% of the box 7 value in box 3.
Thanks Ian, I will give this a try.
You might want to consult with an insurance specialist. They provide consultations for no charge. At least the company I work with provides consultations with high responsibility. Here’s their car insurance