Importing Zero Rated invoices

I have exported sales invoices from one Quickfile account and then imported them into a newly set up Quickfile account. The invoices I have exported did not have any VAT on them as they are for zero rated foods, however all of the invoices on the new system do have VAT on them, please can you advise how VAT was applied during the import process, where has it picked it up from?

All of the invoices are marked as sent on the new system so will I be able to amend them to remove the VAT? I have also allocated some receipts against them, do you know how this will affect them?

To confirm, will I need to delete all of the receipts against them, delete all of the imported invoices and start again?

Many thanks,

If the VAT Rate column is absent and the account is VAT registered any import will assume the standard rate of VAT. You should just be able to modify the invoices without detaching any payments.

Thank you, I have tried to amend a couple and they seem to be ok.

Can you also advise please on what VAT rate is being used when the ‘No VAT’ option is selected? I have only just noticed that on the purchase invoices it allowed me to select from exempt, zero or outside scope, but I can’t remember where and when that was. I haven’t noticed that on the Sales invoices.Is it only when you pay an invoice that you select the applicable rate? And is there anywhere you can check which one has been selected after the invoice has been raised/paid for?

“No VAT” in QuickFile equals zero rated, i.e. the invoices will feature on the VAT return but will not attribute any VAT to the final NET VAT due/receivable.

This is different to exempt/out-of-scope which completely removes the VAT and NET amounts of the invoice from the VAT return calculations. Exempt/out-of-scope can be invoked on the whole invoice by selecting the relevant tick boxes at the bottom of the invoice entry screen.

These boxes appear only if the client/supplier is nominated as “Exempt or out of scope for VAT purposes”, in the client/supplier settings area.

On importing invoices there is currently no support for marking as exempt/out-of-scope which was developed after the invoice import routine.

There’s more on what the different VAT rates mean here and some further info on how to mark invoices as exempt or out-of-scope here.

Thank you and to make sure I have understood correctly, are you saying that Exempt can only be selected for sales and purchase invoices if the option is selected under the client or supplier settings? It’s just that exempt sales and purchases should be included in a VAT return but, from what you have said, exempt won’t show within the VAT return on Quickfile?

Sorry, I should have put the title as Importing Zero Rated invoices, not Exempt! Can this be changed?

Another Sorry, I should also have asked, is it expected in Quickfile that the ‘no VAT’ option is selected for any sales or purchases that don’t have VAT on them, whether it’s zero rated or exempt, at least this way they will be included in the VAT return (and they are not segregated anyway when the figures are submitted to HMRC, all sales and purchases, regardless of whether they are exempt, zero rated or have a VAT amount, are in one total amount). Although if HMRC wanted to check your data it would be difficult to separate it out. And that wouldn’t explain why you would have a separate exempt option, this should just be for ‘out of scope’.

That’s correct!

No, only zero-rated items should appear in a VAT return. See the extract from HMRC’s VAT Guidance.

Exempt goods and services
There are some goods and services that are exempt from VAT. Exempt goods and services are not taxable for VAT, so if you supply them, then:

  • you don’t charge any VAT on them
  • you don’t include them in your VAT accounts
  • you can’t normally claim back the VAT on related purchases

Actually we are mindful to rename “No VAT” to zero-rated as that’s all it should be used for. Anything Exempt or OOS needs to have the appropriate tick box invoked at the bottom as per the previous screenshot.

The backing report that is produced for the VAT returns will provide an easy way to see all zero-rated items included in that VAT return.

thank you again but VAT accounts and VAT return are not the same, please see the link to HMRC which states to include exempt items in your VAT return:

This includes the following paragraph:

How to complete Box 6 and Box 7
Box 6: your total sales excluding VAT
Enter the total figure for your sales (excluding VAT) for the period, that is, the sales on which you charged the VAT you put in Box 1. Additionally, you should also include:
any zero-rated and exempt sales or other supplies you made
any amount you put in Box 8
goods or services you have supplied that are subject to the reverse charge
goods or services that you have purchased that are subject to the reverse charge
exports outside the EU

The above paragraph is for the sales and although it doesn’t say it for box 7 it does state only to exclude outside the scope items and things like such as salaries and loans etc. Exempt purchases should be included.

I also refer to Sage where the code T2 is used for exempt, and they are included in the VAT return.

I’d need to seek further clarification on this, however you can effectively handle all scenarios in QuickFile but the wording may need to be revised. To include an item on the VAT return (in box 7) that carries no VAT, you can use the “No VAT” option for now, from what I can gather this would be the equivalent of using the T2 code on Sage.

Ok, thank you.and if you could let me know the outcome after obtaining clarification that would be great,
Many thanks,

Right now we do not include exempt supplies in box 7 of the return. I had a chat with our accountant who has sat in on various VAT audits with HMRC and he informs me that this is the advice they have been issued. However they did also stress that box 7 is for stats only and HMRC aren’t too concerned if you include it or not as long as the final box 5 calculation is correct.

This seems to be evident based on other conversations I have come across following a quick Google search.

Thanks again. Can you also confirm if this is applicable in Quickfile for box 6 (exempt sales)? At present are these excluded from the Quickfile VAT return if this VAT rate option is selected?

Yes currently if you use the exempt option on sales they will not feature in box 6 of the return. If you want the NET amount to be included on the VAT return you will need to use the “No VAT” option.

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