Different currency invoice

If you’re not VAT registered yourself then you shouldn’t be entering the VAT into QuickFile anyway - just put the purchase as the gross total. If you are registered for UK VAT and you have told the supplier your UK VAT number then they shouldn’t be invoicing you with Irish VAT, they will invoice you zero rated and then you sort out the VAT yourself on your UK VAT return (the exact procedure for doing so depends whether they’re supplying you with goods or services).

You can’t reclaim Irish VAT on a UK VAT return, the only circumstance in which you would record 23% VAT on a purchase in QuickFile would be if you’re registered for VAT in Ireland, and you intend to reclaim it on your Irish VAT return.

Ok but this is fuel and i have to pay the vat and then claim it back from the Irish Authorities. However the confusing thing is that all other invoices on this suppliers account I have entered showing the invoice with 23% vat but the january one will not allow me to do it.

Ok, that’s a question for someone who works for QuickFile then. @QFMathew or @Glenn

Hi @ESL62

Any VAT rates that are saved in the advanced settings area of your account should appear for you when creating the invoices.

Can I just double check that the VAT rate (23%) is setup for your account please? If you go to Account Settings >> Advanced Features, is 23 is the Additional Purchase VAT rates box?

No it is not however in the supplier details screen default rate is set to 23% I have used this for 6 months previous and for February and yet January will not allow me to select it. If you wish you can log into my account and view?

There were a few changes made here in the supplier section due to queries raised elsewhere (see here for example), so it may be the case that this has affected it, although I can’t say for certain - I’d have to consult with a developer to verify this.

Adding 23% to the VAT box I mentioned above should do the trick however. If you create a new invoice, the 23% should automatically appear, but if you’re editing an invoice (which I assume you as you mention January’s invoice), it will only appear if it’s enabled in your account.

Did you originally create February’s invoice with a different rate and then update it to 23%, or was it created with 23% in the first place?

February was created with 23% however I did originally create January the same way but yesterday I was trying to amend my vat return as the figures were ending up in the wrong places and after trying to amend the invoice now I cannot get it back the way it was ie with 23% showing. Maybe you should advise me how I should enter these. Here is the example if you could guide me in the correct direction:

1 Supplier is in Ireland and is vat registered
2 I am in UK and vat registered
3 Invoice shows 1000 + 23% vat = €1230
4 I pay sterling equivalent £1070.10 out of my current account

Add 23% as a VAT rate to your account in the Advanced Features section of your account. This will enable it for all purchase invoices, but it’ll always be available for you then.

I can’t comment on the particular VAT situation - this is something your accountant would have to verify I’m afraid (I’m not one).
But to record the payment from a GBP bank account to a EUR invoice, use the Log Payment button on the invoice itself. This will create a bank transaction for you, and allow you to enter both EUR and GBP values.

Could Ian Roberts advise on this?

@ian_roberts may be able to advise you on this, but as far as I’m aware, he’s not an accountant either.

I’m not an accountant, just a regular user of QuickFile who has had to learn all this stuff about VAT returns, reverse charge vs acquisition tax, paying overseas suppliers in different currencies, etc etc as I go along. I’ve never had to deal with a case like yours of buying something in another country and being charged the local VAT (as opposed to importing something from another country at zero rate).

Unfortunately the fuel company does not zero the vat. You have to pay it then claim it back from the Irish government but I need the figures to go in the correct places in the tax return. I am rolling out the QF system from 1st April so I need all these odds and ends tidied up.

Actually then, I’d be tempted to record all this in a slightly different way. Rather than recording the 23% as VAT (as you would for UK purchases) I’d create a new nominal somewhere under assets and liabilities for “Irish VAT paid”, then record the purchase in QuickFile as two lines both set to “no VAT”, one for the amount net of VAT posted to the usual 7300 code for motor fuel and the other for the 23% VAT element posted to the new “Irish VAT paid [asset]” nominal. Mark the purchase as out of scope for UK VAT so it doesn’t appear on your UK VAT return.

The benefit of doing it this way rather than creating a 23% VAT rate in QuickFile is that you don’t mix your Irish VAT into the UK purchase tax control account, and you don’t have to adjust your UK VAT return in QuickFile. The new nominal is now the Irish equivalent of the “purchase tax control account” for UK VAT, and will show on your balance sheet giving the total amount of Irish VAT you have paid out and not yet reclaimed. When your repayment claim comes through you can tag it to the same nominal (probably with an adjustment for currency loss/gain since your repayment will be in Euros and your accounts record GBP).

An alternative if you want to keep your record in QuickFile in Euros might be to set up a Euro-currency “bank account” instead of the asset nominal. When you buy fuel in Ireland, you record the money paid out as a bank transfer to this bank account (for the gross total in Euros including the Irish VAT), but record the purchase in QuickFile for just the net excluding VAT, “no VAT” and “out of scope”, and mark it as paid from the euro bank account. This has the same effect as the two line invoice, leaving the balance on the Euro account equal to the amount of VAT you have paid and not yet reclaimed. When the repayment comes through that is simply a transfer from the Euro account to whichever real bank account received the refund, and you can use the automatic currency loss/gain tool at that point to fix the currency difference.

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I am a bit lost there. Really I need to get the vat amount to appear in box 2 on the vat return dont I?

No, if it’s Irish VAT then it shouldn’t appear on your UK VAT return at all. The process of reclaiming Irish VAT from the Irish government is completely separate from the UK VAT return. It sounds like you need to go over all of this with your own accountant, particularly if you’ve been mistakenly claiming Irish VAT back on a UK return in the past.

Box 2 is for cases where you have bought goods from a supplier in another EU country and had them shipped to you in the UK, and the supplier has invoiced you at zero VAT. You record the purchase in QuickFile with the net amounts equal to what the supplier charged you without VAT and the VAT rate set appropriately for each item under UK rules - so usually 20% but could be 5% if you’re buying tampons or “no VAT” if you’re buying food/children’s clothes etc (which are zero rated when sold in the UK) - and tick the “apply VAT reverse charge” box which reverses the VAT and puts it into box 2.

Could I not treat this invoice the same?

No, you cannot reclaim Irish VAT on a UK VAT return.

Seriously, talk to your accountant, they’re the ones who know your specific circumstances and can advise you on what you need to do. Once you know what you’re trying to do then this forum might be able to help with how you represent things in QuickFile.

I understand that but if I show the Irish Vat figure as a reverse charge it can appear in box 2 and then again in box 4 would this then not cancel each other out and the total vat paid would still be correct?

No it wouldn’t - you can only use the box 2 mechanism if the supplier invoiced you without charging Irish VAT in the first place. For a normal purchase from a UK supplier you pay the VAT to the supplier and then claim it back from HMRC in box 4. For an EC acquisition you don’t pay any VAT to the foreign supplier, but instead you “pay” the appropriate amount of UK VAT in box 2 and “reclaim” the same in box 4 (which seems a bit pointless but makes sense when you consider partial exemption rules for businesses who can’t reclaim the full amount). In your situation you have already paid Irish VAT to the Irish supplier so if you want to claim it back you have to claim it from the Irish tax authorities, not from the UK HMRC (Refunds of VAT for UK businesses buying in EU countries - GOV.UK).

Non-UK VAT has no place on a UK VAT return.

Ok I think I have it right now if I just enter the invoice with 0%vat and then tick out of scope it puts it in neither box 2 or 4.