HOME / COMMUNITY Switch to knowledge base

Clarification of VAT settings for imports

I have paid a Chinese manufacturer for some printed circuit boards. They quoted

£24.11 Goods
£16.86 Shipping DDP via DHL

£40.97 total which I paid for on debit card at point of order. (Bank amount was £42.94).

I have created a purchase representing the supplier payment of £42.94 (matching the bank payment) and marked it as ‘No VAT’.

When the goods arrived in the UK, DHL contacted me for import payments (£19.80). I have a payment confirmation for amount showing

I have a C79 for £19.84 and a also a payment statement from DHL for £11.00 for ‘Advanced Payments (AV)’ and VAT £8.80. I am guessing the ‘Advanced Payments’ means ‘Import Duty’ and the VAT is Import VAT which I can reclaim as it sems to match ~20% of the goods and shipping.

If this is correct, what do I do with QuickFile and the C79? I read in one of the forum links that perhaps I should create a purchase for DHL with a subtotal of 0.00, set VAT to 20% and enter the total as £8.80. Is that correct?

What should I do about the extra £11.00 in the purchase?

Many thanks.

I believe this is the same thing basically. How to allocate abnormal VAT amount

Thank you @Lurch .
This is what I did (I created a new category for Import VAT which is reclaimable as opposed to Import Duty which isn’t and I believe is DHL’s “Advance payments”).

I had to reverse calculate a figure of £44.00 to make the VAT value equal to £8.80 at 20% VAT. Maybe this is due to variations in the USD-GPB exchange rate but as it matches the DHL payment, I’m hoping this will be OK.

Does this look right to you?

For VAT : Subtotal column can take zero value & still let you put whatever VAT amount in VAT column, this doesnt need reverse entry in the next line (great feature from QF, shame cannot be done while doing sales invoices but thats a separate issue). You can either use General Purchases or create new category of Import VAT as suggested in above.

As far as I know, advancement charges from DHL are charges for using their Duty Deferment Account on your behalf for clearing goods from customs. This is not import duty as this would be states clearly as so on DHL invoice if items imported are dutiable, which then can go as Import Duty in category as above. Advancement charges being admin expense, I just put it as post & carriage charges as they really are handling charges by DHL/Fedex/UPS…etc. Sometimes you will see all these three charges on couriers invoice if items are dutiable at imports. If you use your own duty deferment account, you can save on these charges by DHL, instead use own DA account.

This topic was automatically closed after 14 days. New replies are no longer allowed.