Postponed VAT Accounting

I have searched and cant find anything relating specifically to managing postponed VAT accounting within QuickFile. There are a few threads relating to processing the VAT only coming in from the freight carrier but nothing in relation to true postponed VAT accounting. For example purchase of services from a Australian supplier stating reverse charge VAT applies - for simplicity say the invoice is for £100. The VAT reporting should be an increase in box 1 of £20 recording the output VAT and a corresponding increase in box 4 of £20 being the input VAT, boxes 6 & 7 should also be increased by £100 to reflect the base costs. The overall effect on the tax return is nil however the VAT still has to be reported.

My question is how should this be dealt with in QuickFile, the supplier invoice can only be recorded at £100 or when you pay it there will be a balance remaining. Even if you were to record the transaction at £100 + VAT then this would only record the input VAT, how do you capture the output VAT for box 1? Is there any functionality within QuickFile for dealing with this or it a manual workaround required?

Logically I would think an additional check box or something is required on the supplier invoice indicating that this is a postponed VAT transaction. Then when the supplier invoice is recorded for the £100 the accounting entries should be as follows:

DR Expense Code (say materials) £100
DR Input VAT £20
CR Creditors £100
CR Output VAT £20

With both the input and output VAT lines being picked up in the VAT return boxes 1 & 4 and the Expense code being picked up and added to both the total sales and total purchases boxes 6 & 7.

Does this functionality exist within QuickFile??

Thanks in advance.

Your “services from Australia” example is a case of a reverse charge, not postponed accounting (which is something the Government introduced at the start of this year specifically for imports of goods), but in both cases you’ll find the relevant tickboxes under the “Additional VAT options” section at the bottom of the purchase editing screen. If you click on the “edit” link there you’ll get a set of checkboxes where you can choose to apply the rules for postponed accounting on imported goods, reverse charge on services (your example), and a few others.

For your specific example you’d create a purchase for £100 net, select 20% as the VAT rate, then tick the “reverse charge on services” box. This will show the £20 VAT as added on and then taken away again, leaving the purchase total as £100, and will put the right entries on your VAT return for the reverse charge.

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Ian you are correct sorry for the mis-naming I am trying to do too many things at once. Your solution works perfectly thanks for your help.

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