EC Reverse Charges for services

Hi @QFMathew, @ian_roberts, and all,

Based on a number of threads here in this forum, for example:

I went through my accounts, and checked whether I am affected as well - and yes I am affected by QF wrongly applying EC Reverse Charge for goods to services purchased.

But I am also affected by a bug that I think hasn’t been reported yet, and that is the wrong VAT reporting for services provided to customers in the EU!
According to HMRC VAT Notice 700/12 section 4.6 I need to aggregate all services I provide to EC customers in Box 6 (this is in line with section 3.7 in the same document. Section 4.6 applies to me as I am doing cash accounting).

Quickfile however aggregates all that in Box 8, which deals with supply of goods to EC states.

In other words, I’d have to do the same “adjust-o-rama” I do with service purchases from the EU (see above) for all service sales to business customers as well…

Support, can you please confirm? I am happy to provide VAT reports as real life material to you internally.

Cheers,
Michel

At this time we do not differentiate between goods or services for both supplies and acquisitions. Adjustments need to be made on both side for the relevant statistics boxes on the VAT return.

As you may appreciate we have a huge degree of uncertainty right now in terms of the VAT regime post-Brexit. The work required to introduce the additional markers for goods and services is quite significant. We are therefore currently waiting on clarification before making any changes to the current VAT reports.

Hi @QFMathew,

I appreciate that, but that has a serious knock-on effect as described in Vat return ec sales services only

In my case I do not supply any goods to the EU, just services - and that combination makes it apparently impossible for me to electronically submit my ECSL via Quickfile!

On another note, I do not agree that this has been moved from bugs to support.

It is in my interpretation at least a clear bug in Quickfile - with a workaround, yes, but still a bug as QF implements it in a way that is against EC single market regulations.

I understand your concern and we agree that the current setup is not ideal. It would just be foolish on our part to commit significant resources to this problem, knowing that within 6 months the entire regime will likely be overhauled.

The reason for the reclassification to support is that the behaviour is inline with how the system was designed. Our developers use the “bugs” category for situations where something deviates from expected behaviour. If of course we receive indication that the current regime will remain in force for some time to come, then we will look at implementing the required flags so that manual adjustments will not be necessary.

Does that mean that your team implemented it this way willfully and in full knowledge of it being against regulation?

Apart from that, how am I supposed to submit my ECSLs? I am preparing for rolling back the last return and add the aggregated adjustments, but I fear that once I do that I won’t be able to submit my ECSLs - unless I go the old fashioned way on paper.

Just need to know what’s awaiting me today…

From time to time it is reasonable to expect that there will be manual adjustments required in order to complete a tax filing. In fact there are many less common VAT schemes that we don’t support at all in a fully automated fashion. In the same token you can’t use QuickFile to generate a final set of accounts for submission to Companies House, making relevant adjustments is a fairly common practice in accounting.

Whenever there is a box 8 figure on the return you will be able to generate an ECSL. If you have any doubts about the data in that ECSL you are welcome to private message either @QFMathew of I and we can take a look and advise you on the best course of action.

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