HI, this is an accounting question for advice from anyone. We use Postponed VAT Accounting for imports (PVA). On a recent import UPS charged VAT using their disbursement account and also processed the import under PVA so the VAT due appeared on the next PVA Statement on our HMRC account. UPS will fix the error but it may take 6-8 weeks. In the meantime I need to file a VAT return. The question is… Do I:
A) Enter the vat paid on the UPS purchase invoice and ignore the PVA statement? or
B) Enter the vat paid on the UPS purchase invoice and enter the PVA statement amount on the Product Purchase Invoice there fore paying twice until the issue is resolved then reversing one or UPS Issue a credit and refund?
The vat is nearly £1,000
Any thoughts?
When creating a sales or purchase invoice in QuickFile you will see a number of additional VAT options in the invoice editor. These options can be used to control the boxes within which the NET and VAT totals are reported in your VAT return. In this guide we explain when to use each of the VAT options and the effect that each will have on the VAT return. VAT on sales The examples provided are below for standard VAT accounting and are based on a £1000 sales invoice plus VAT (where applicable). …
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The VAT on the PVA statements is effectively a reverse charge - you declare it and reclaim it on the same return so the net effect on your cash flow is nil. Put this on your VAT return as usual.
The issue seems to be the incorrect charge from UPS. Have you paid their bill including the VAT? If you have been charged VAT, and have a VAT invoice to support it, then you can reclaim the VAT. You will then have to pay it back next time when UPS issue the credit note. However, if you haven’t put the bill through your accounts, because it’s in dispute, then there is no need to include it in your VAT return. You don’t have to account for- or pay! - an invoice you reasonably believe to be incorrect and where you’ve raised a query with the supplier. You can wait for them to sort it out and account for it all then.