Hopefully this will be a quick question for someone who knows anything about accounting.
We paid an ‘attendance fee’ for an event to sell our products at for which we were not charged VAT (unsure if this is because they are not VAT registered or whether it is not a VAT chargeable item). Struggling to work out how to account for this so it doesn’t throw my VAT return out of wack?
Any guidance for a non-accountant?
If the invoice doesn’t state a VAT rate or number, then I’d imagine you can just record it as ‘No VAT’. I’d imagine they aren’t a VAT registered business so haven’t (or rather can’t) charged it
However, I’m neither an accountant nor VAT registered
OK - that makes sense. Therefore I’m assuming it is ok that on a VAT return the value of purchases excl. VAT (box 7) does not correspond directly to the VAT reclaimed on purchases and other inputs (box 4) - because VAT was not paid on all those purchases?
When I have tried submitting a return like this on the HMRC website in my experience it gives a warning stating that these two values do not correspond. Should I just ignore the warning on the basis that I know why they don’t correspond, or should I be accounting for purchases where VAT was not charged in some other way so they are not factored into the VAT return and therefore boxes 4 & 7 will always correspond?
The value of the invoice will still appear on box 7 but no VAT would be attributed on box 4. This is normally how you would report non-vatable purchases. An exception to this would be if the company was based outside the EC, in which case it would be completely out of scope and would not feature on any of the VAT return boxes.
Box 7 is a statistics box and won’t affect your VAT calculation, the main thing is it’s not featuring in box 4, which it won’t if you select the “NO VAT” option.
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