While posting an invoice for EU country service issued in January 2021 I have ticked new box “Reverse charges on services”. As I am GB based company I was sure that after doing so vat on this services will appear in box 1 and 4 of vat return. Instead of that it still appears in box 2 and 4. According to the new rules after 31/12/2020 the only acquisitions you include in box 2 are acquisitions of goods from the EU to NI. Supplies of services within the reverse charge should be declared in box 1. What do I do to move it from box 2 to box 1?
We have a guide on what each option does and how it affects your VAT return, here: VAT Options Explained
When you say you’re posting an invoice - do you mean a purchase or a sales invoice?
Sorry, it is a purchase invoice. Purchase of services from EU country.
QF instruction also says it should go to box 1 and 4
"|Reverse charge on services|Use this option if you have received a service from an overseas supplier and have been asked to self account for VAT.|
Box 1: 200
Box 4: 200
Box 6: 1,000
|Box 7: 1,000||"|
Just to check here - you have a purchase invoice with “Reverse Charge (Services)” set on it, but you’re seeing the figure in different boxes to those in the guide (e.g. 1, 4, 6 and 7)?
Yes, that is correct. I have a purchase invoice with “reverse charges on services” set on it, but I am seeing vat figure in box 2 instead of box 1. What shall I do about it?
Supplies of services should always have been in box 1, not 2. If you’re seeing them in box 2 I suspect you’ve had the supplier configured with the old “VAT registered in EU” setting and been using the old “apply reverse charge” tickbox which actually treated it as an acquisition of goods instead of a reverse charge.
Go into the supplier’s settings and change them back to “no special VAT treatment”, then see if this fixes the VAT return.
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