I recently had to go on a business trip to Sweden and booked a hotel through Booking.com using my business debit card. I am now trying to update Quickfile but I’m not fully sure how to record everything properly for UK VAT purposes.
In the following image, you can see my Quickfile entries for the hotel including NON-GBP transaction fee given that I was charged in Swedish Krona. How do I account for the 12% VAT in GBP and is there any hope of me reclaiming that? I’m not sure what exchange rate was used and I’m horrible at maths so any help would be very much appreciated.
You don’t - there isn’t. Just record the total including (Swedish) VAT as the net at zero (UK) VAT. There is a mechanism to reclaim certain foreign VAT directly from the authorities of the relevant country but it’s probably not worth the hassle for the sake of £23.
Thank you so much for replying! Your solution makes things much simpler. Completely agree about it not being worth the hassle for the sake of £23 - I just wasn’t sure if it was something I had to do given that it’s in the paperwork.
For your QuickFile purchase records you only separate out VAT that you are eligible to reclaim on your UK VAT return, i.e. UK VAT for which you have a valid VAT invoice from the supplier showing a UK VAT number.
If it was a larger amount of foreign VAT and you did want to go through the process of reclaiming it from the foreign authorities, you would still record it as zero VAT in QuickFile since the reclaim doesn’t happen through your UK VAT return - in this case I’d make a new balance sheet nominal for “overseas VAT”, and do two purchase lines, one for the net (to the usual category) and one for the overseas VAT (to the new overseas VAT nominal) but with both lines at 0% in the VAT column.
Thank you for the additional information. It’s very helpful and much appreciated. You have made some very important distinctions for me that hadn’t previously registered. It seems like the process for claiming back VAT from foreign authorities is a bit of a rigmarole and something I’ll probably never attempt given that I don’t ever foresee it being worth it. However, you never know so I am very thankful that you took the time to provide some tips.
Again, it’s very kind of you to have helped. I know I’m repeating myself but time isn’t free and people like you make the world a better place. I’ll be doing my best to pass it on in my particular area of expertise!
