Exempt from VAT (Box 7)


I am looking for some advice please

Can anyone advise how you would process a purchase invoice which is exempt from VAT?

I do not want to show the expense in box 7 on my VAT Return?

I think this may help:


I will have to register for VAT soon and have just been reading some of the topics - as I buy and sell a few zero rated items this thread caught my interest.

What would I do with an invoice where several items have 20% VAT and a couple of items are zero rated?

You would just assign 0% (NO VAT) on the sales/purchase invoice for the corresponding line. This will still factor in those totals on boxes 6 and 7 of your return but would not add or reclaim any VAT.

I’m dreading this Glenn…aaargh.

Oh and ebay fees, dear me that’ll be tricky.

I think that would be one of the easiest bits as they will zero rate all their invoices if you supply them with a VAT no.

We have a summary of VAT Rates here.

There are a few different scenarios where VAT is not charged but how these items are reported on the return (specifically box 7) differ slightly.

If it’s zero rated or exempt it would normally still appear on box 7 (total value of purchases and other inputs). If it’s Out of Scope then it won’t feature in box 7 or anywhere else on the VAT return.

In any of the above cases however, no VAT will be reclaimed, so this relates purely to the statistic boxes on the return (boxes 6 and 7).