FRS & EC Aquisiton

[inerticsltd]

I have the same problem as in this thread:

FLAT RATE VAT (FRV): Reverse Charge, EC Acquisitions: Total value of supplies to othe EC states

The adjustment for goods imported from the EU on the VAT return, unless capital 2k conditions are met, should be as follows: [image] A journal will also need to put through to move the VAT Manual Adjustment to gross up purchases: [image] Can you please provide us with an example so we can look into this.

I had a purchase from EC supplier where acquisition tax was applied but because I am on FRS I had to make the manual adjustment to nill (0) BOX4 of the VAT return.

Now based on this thread I need to do the following:
“journal will also need to put through to move the VAT Manual Adjustment to gross up purchases”

Otherwise VAT Manual Adjustment shows up in balance sheet.

@FaradayKeynes you probably know how to do that, could you guide me on this journal that need to be entered?

[inerticsltd]

It probably would be easier to understand with pictures:
The adjustment for goods imported from the EU on the VAT return, unless capital 2k conditions are met, should be as follows:

A journal will also need to put through to move the VAT Manual Adjustment to gross up purchases:

This portion is what I need help with:
“A journal will also need to put through to move the VAT Manual Adjustment to gross up purchases”

How this journal should look like?

Should it be?

Cr Manual Adjustments 200
Dr General Purchases 200

Or what?

[inerticsltd]

This is for Joe or Glenn from QF to confirm.
Here is how I understand the process:
We make VAT return and an Adjustment for BOX4

Than it automaticly debit 2204 and credit 2202:

Than we pay our VAT and tag it in the bank and it debit 2202
Than we make a journal to move the VAT Manual Adjustment to gross up purchases

And that’s what we get:

Is that correct?

[Joe]

That’s correct, well understood.