Reverse charge on some suppliers invoices

[GaryWilliams]

Hi,

On some of my suppliers invoices, it says to apply a vat reverse charge. I understand that if the supplier charges me £100, I have to pay HMRC the £20 vat. How do I enter this charge in QF?

Cheers

Gary

[FaradayKeynes]

You need to click on Additional VAT Options [?] while recording purchase invoice and tick Reverse charge option

[ian_roberts]

There are two different types of reverse charge, one for purchases of services from an overseas supplier and one for certain types of purchases (mostly construction industry related but also things like wholesale gas supplies, computer chips and mobile phones) from suppliers in the UK. Both are supported by QuickFile under the “additional vat options” section at the bottom of the purchase editor.

You need to enter the purchase with the total on the supplier invoice as the net, and apply the appropriate UK VAT rate for the supply (usually 20% but sometimes less). For your example this would be £100 net and the 20% VAT would add £20 in the VAT column.

Now tick the appropriate reverse charge box in the vat options section at the bottom - “reverse charge on services” for an overseas supplier or “CIS reverse charge” for a domestic supplier. This will deduct the £20 in the footer putting the purchase total back to £100.

On your VAT return the £20 will go in both boxes 1 and 4, effectively “paying” it to HMRC and simultaneously “reclaiming” it like you would on a normal purchase. The net will show in box 7 for both types of reverse charge, and in box 6 for the overseas version but not for the domestic version.

[GaryWilliams]

Hi FK & Ian,

Brilliant. Thank you for the very clear explanation.

Cheers

Gary

[GaryWilliams]

Hi FK & Ian,

SORTED!

I found my two invoices where ‘Reverse Charge’ had to be applied and corrected my QF entries via the ‘Additional VAT Option’ choice. It was very easy and, once done, it was obvious how it worked.

Once again, many thanks.

Cheers

Gary