Splitting Import Duty and VAT

[JudyA]

Trying to tag a bank transaction which includes Import Duty and VAT liability. Not a payment to a supplier; not pure VAT. How do I tag one payment but split between these 2 elements, when the QF system wants it to be 1 or the other? thanks

[ian_roberts]

Payment of “VAT liability” usually means when you’re paying to HMRC the amount you’ve declared on a VAT return. If this is payment to customs to release an import then you probably should treat it as payment to a supplier, log the import duty as “no VAT”, and create two invoice lines for the VAT part - one at the nominal “net” value on which that VAT is calculated, with 20% VAT applied, and one for minus the same “net” at “no VAT”.

That should leave you with a purchase that has the import duty as the net amount and the VAT as the VAT amount, then the bank payment would be “payment to a supplier” to pay off this purchase, and the VAT will be reclaimed in the normal way on your next VAT return.