Domestic Reverse VAT Charges for specific invoice item

Support
1

Hi, HMRC have just brought in (as of 1st feb) a new directive for reverse VAT changes for telecommunications. Which has left me wondering if Quickfile is able to deal with (domestic) reverse VAT on specific line item types?

2

I’m afraid we only handle reverse charging at the invoice level, so it would need to be split out into it’s own invoice at this stage.

3

How do you go about that then? Just looking at the invoice screen now. Is the accounted for when submitting a HMRC VAT return?

Thanks

4

You first need to go into the client settings and mark the client as “VAT Registered in another EC Member State”.

You will then see a reverse charge option on any invoices you create for this client. Clicking this options reverses any VAT applied.

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5

Does it matter that they are domestic and not inter EU state invoices? Will it still be accounted for correctly or will it spear wrong on the VAT return? Sorry for all the questions :smile:

6

VAT can be quite complex, there are many different schemes and accounting methods issued by HMRC each with their own reporting requirements. The reverse charge tools on QuickFile will work for intra community acquisitions. I would have a word with your accountant on this, it may require manual adjustments to the boxes on the return before submission.

7

Hi is the service classed as wholesale telecommunications? Only wholesale is subject to the new reverse charge rules, to confirm are you the purchaser - therefore the one liable to reverse charge?

8

Hi, having a further read here are my thoughts - the above steps will not help you achieve your desired outcome, as the EC acquisition reverse charge will enter the net purchase value in box 9 which will appear as though you have brought goods in from another EC member state. The new domestic rules will require your purchase as normal to be in box 4 (Purchase VAT) and 7 (Net Purchases). But with the addition of output VAT in box 1 (sales VAT) as the supplier would not have accounted for output VAT in box 1 on their end. If that makes sense. Maybe the good guys at QF can look to allow for this, others wise you would have to adjust box 1 manually to reflect this on your VAT return. Thanks

9

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