Out of Scope, Reverse charge and VAT Exempt Options within bank tagging

[DABS]

Continuing the discussion from New "Out of Scope" and "VAT Exempt" Filters:

@Glenn

This week we have release a few updates to more efficiently handle Out of Scope and VAT Exempt sales and purchases.

Rather than zero-rate your invoice and manually adjust the return (as was previously suggested), you can now flag the whole invoice as either “Out of Scope” or “VAT Exempt”, both these flags will fully exclude the invoice from the VAT Return calculations.

If you want to understand a bit more about all the wonderful VAT rates and exemptions, take a look at our new guide here.

You can apply these new filters to the invoice using the following check boxes (just above the save buttons):

The above options don’t appear by default for new invoices so you will first need to mark the supplier or client as “Exempt or Out of Scope for VAT purposes”. You will find this option in the supplier or client settings page.

Now when you run your VAT return, these flagged items will be completely excluded from the calculations.

Are these options going to be available on the bank tagging screens, same as reverse charge is, so long as the option is set for the supplier?

i.e. Create a new purchase from a single transaction on the bank tagging screen.

[DABS]

Also could you clarify on this from the help pages

---

With the addition of the VAT MOSS rules
(1st January 2015), it will also be necessary to levy VAT at the
consumer’s local VAT rate within their EU member state for certain
digital services. This in effect would mean that the invoice is outside
the scope of UK VAT.

Do you mean sales or purchases or both.

I have tried reading HMRC’s and the .GOV’s website, but it just makes my head spin as there is no plain and simple answer, the closest to help i could find was on irelands website but that doesnt totally clear it up., may the UK should follow suit and put clearer explainations on the sites

Also from what i read, all supplies/services from outside the EU to a UK VAT registered business, should have the Reverse Charge Applied, but the out of scope doesnt seem to do that and the only way i can see to do it is to set the supplier as registered in another EU state, which seems wrong to me, as this would show in box 9 acquisitions from other EC states ???

[Glenn]

VAT is quite a complex area of accounting to say the least. The VAT MOSS rules came into effect in January 2015 and dictate that certain items when sold to clients in other EC member states must levy their local rate of VAT. I would check the scope of this scheme as I understand it is only applicable to certain types of digital goods, the rough criteria is as follows:

You supply broadcasting, telecommunications or e-services?(ebooks, games, apps, music downloads)
For money
To consumers
In another EU country
Without using a marketplace

In such cases you would mark these invoices as out of scope on QuickFile and then set the VAT rate to match that of the client’s domicile country.

Finally, yes those options will eventually be available on the bank tagging side, although I don’t have a time-frame for this right now.

[Grinden]

Hi,

Just to follow up on this question that was raised a few years ago. It was stated that the ability to set Out of scope and Exempt would be coming to the bank tagging at some point, but I can’t find it, so I’m guessing it hasn’t happened yet. Any plans to do it soon?

Many thanks,
Richard

[QFMathew]

Hi @Grinden

I’ve re-opened the post you mentioned and merged your post into it to keep it all together.

Nothing has changed here I’m afraid. The options do exist, but not within the bank tagging area of your account.

[TCG-UK]

IM SURE ITS JUST ME BUT i CAN NOT FIND HOW TO MAKE A CLIENT EXEMPT OF VAT BY DEFAULT. MY CLIENT IS BASED IN gUERNSEY

[QFSteve]

Hello @TCG-UK

As @ian_roberts mentions in this post ““Exempt” is generally a function of what you are selling, not whom you are selling it to”.

As such there is no option to make a client Exempt by default.