Hi,
I had a business trip to Italy last month and ended up with loads of euro based expenses which I paid for using my UK business account debit card.
I’ve enabled foreign currency and added the Italian VAT rates.
I’ve then created suppliers as I would normally do for UK expenses (specifying Italy as the country, the correct vat rate etc.). I’ve then created a new purchase and entered the euro amount (and even adjusted the exchange rate so the purchase matches the billed GBP amount. However, when I try and tag the imported bank statement entry (as i’ve done quite happily with my UK purchases) it refuses to find any matching entry. If i use the option to link it to the supplier it creates a new bank statement entry (effectively debiting my bank account twice for the same item).
Am I doing something wrong, or is there a better way? The purchases are appearing correctly in the VAT report (under EU acquisitions). Help!
I’ve just tried doing this the other way. So i’ve clicked on the Tag a bank entry and created a new invoice and selected the Italian registered supplier. This does then add the entry to the VAT return EU acquisitions, but there doesn’t seem to be any mention of the original euro amount. All of the supplier reports show the GBP amount charged by my bank.
Is this an issue??
You shouldn’t add the Italian VAT rates to QuickFile - you can’t reclaim Italian VAT on a UK vat return.
If you’re buying something from Italy, having it shipped to the UK, and the supplier has invoiced you as zero rated then (and only then) you can treat it as an EC acquisition, applying the UK vat rate when you record it in QuickFile. But if it’s something on which you have been charged Italian IVA then you can only claim that back from the Italian government, not the UK one. See the “reclaiming Italian IVA” section at the bottom of this article. If you can’t be bothered to go through that then you just have to record the IVA-inclusive total as the net with no VAT.
As for logging the payments, yes, you need to do it from the purchase invoice side so you can specify both the euro and GBP amounts. This will create duplicate bank transactions, just delete the untagged ones.