VAT for purchase outside UK?

Accounting
1

Hi,

My co-director of a British, VAT-registered Ltd company has emigrated to the USA. When he purchases an item using the company debit card from a US supplier for delivery to himself in the US, how do I record the VAT on that purchase in QF? Is this zero-rated?

Many thanks.

2

Hi @brendanh

This is likely to be classed as ‘Out of Scope’ for VAT purposes, although I’m not an accountant, so I’d advise you to check with yours to be sure you record this correctly.

To record out of scope invoices, you would need to set the client/supplier up to handle these. There’s a guide in our Knowledge Base which you may find helpful:
http://community.quickfile.co.uk/t/create-a-vat-exempt-or-out-of-scope-invoice/10199

There’s also further reading on the different rates here:
http://community.quickfile.co.uk/t/vat-rates-explained/8928#5

3

Hi. Is the transaction personal or business? Assuming business: The U.S. charge GST (Goods, Sales & Tax), similar to the VAT system in the UK. IF you’re buying goods in the US for business to the US (i.e. the goods to not move from the US to the UK) then you would treat the transaction as “Outside the Scope” and must not attempt to reclaim any of the GST (or VAT). Note if the goods do move from the US to UK (this will count as an import subject to UK VAT and duty - of which the VAT can be reclaimed in your return). Hope that helps. Michael

4

Thanks Michael, yes business, cleared that up, very helpful.