Purchase from US or other Non-EU country not showing on VAT return in box 7

I make regular purchases from the US and China and I have ticked the invoices for these purchase to be outside the scope of VAT, since no VAT in charged on these purchases and the invoices are in a different currency. However I have notices that when I download the calculation for that periods VAT return these purchases do not show in the purchases list , meaning they are not recorded in box 7 on my VAT retun. Is this correct as they are no in the scope of VAT or is there something going wrong here?

P.S - I have noticed that if I un-tick these invoices from being outside the scope of VAT the purchases do show up in their converted GBP amount. Can someone please clarify what is correct here please, thanks.

QuickFile will completely exclude any items that are marked as “Out of Scope” from the VAT return.

According to HMRC’s guidance (source):

###3.8 Filling in box 7

However, you do not include the value of any of the following:

  • income which is outside the scope of VAT because it is not consideration for a supply

If you need the item to appear in box 7 (Total value of purchases) but without any impact on the VAT calculation you can instead apply “No VAT” on the item level drop down.

Thanks for the reply. I am still a little confused though as I am talking about purchases and not sales. So I purchase a physical item from the US that I intend to sell on, and mark the invoice as “outside the scope of VAT”. Is that the correct thing to do as then it does not show in purchase box 7 on the VAT return. What I don’t get is the following.

  1. Is a purchase of this nature “outside the scope of VAT”?
  2. Should purchases of this nature be shown in box 7?

Marcus you are correct. If you’re making a purchase of any good outside the EU, this is known as an import for VAT classification. And should be featured in box 7 (Net Purchases) and no other boxes. Unless it’s a service in which case it’s slightly more complicated.

As Glenn mentions the best way to do this in QF is to mark purchases as “No Vat”. Just ensure that there’s a reference in the address / description on the purchase to show it’s from the US - internal records only.

p.s. I should add, but not to complicate things, that if you have paid any duty or VAT on the import at customs (and only cross this bridge if you have) then you can reclaim the VAT element, but not the duty when you receive a C79 from HMRC. That is the evidence to reclaim the VAT back. Which means via a VAT return adjustment in the future you can directly increase the value of box 4 (purchase VAT) when the C79 arrives.

Thank you.

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