Hoping someone can help me with this (I’m new to accounting and running a company in general). How do I go about creating an invoice that is for items that fit under a domestic reverse charge (e.g. phone reselling)? I understand if the invoice amount is above £5000 then I should not be charging VAT however quickfile does not seem to have a checkbox for domestic reverse charges on an invoice. Do I just manually set the VAT to 0% WITHOUT ticking the VAT Exempt / Out of Scope VAT and include a note about the buyer being responsible for paying VAT to HMRC? How does that work with the VAT returns that I need to submit to HMRC?
Hi @QFSteve. Thanks for getting back to me. From what I can see, that option only appears when creating a purchase, not when creating an invoice. Is there some setting I need to enable for it to appear when creating invoices?
Thanks @QFSteve – I was under the assumption this is only for CIS. I am not registered under the CIS and my context is in regards to phone reselling and not construction services. Is it still valid for me to have this enabled?
Although the option is labelled “CIS reverse charge”, it is the UK domestic reverse charge mechanism and applies to both CIS and non-CIS domestic reverse charge transactions.
For domestic reverse charge purchases, the VAT is correctly reported in Box 1 (VAT due) and Box 4 (VAT reclaimed), with the net value shown in Box 7 only. Box 6 is not affected, as it is for sales only.
For domestic reverse charge sales, no VAT is charged and only the net value of the sale is included in Box 6.
