We are registered for Dutch VAT (BTW) because we run events in The Netherlands. This all works fine, but I am unsure how to categorise the payment to the Dutch VAT authorities in Quickfile. Do I treat it like a UK VAT payment? Or do i simply set up the Dutch VAT office as a supplier?
There are probably a few ways to handle this.
In order to provide a more specific answer, can you please let me know how you invoice for Dutch VAT in QuickFile? Do you create invoices as you would with UK VAT, but with a different rate?
Yes, exactly - we have set up a 21% rate for BTW. In fact almost all of this is card transactions through Stripe when people buy tickets for events in the Netherlands, so we are creating invoices ‘after the fact’.
We reclaim very little input VAT, so it’s usually just a bill to pay once a quarter.
Thanks for clarifying…
If you are submitting your UK VAT returns via QuickFile you just need to be careful to ensure that your Dutch invoices aren’t included. You may therefore need to make a manual adjustment when you send your UK VAT return to HMRC.
Providing you are adjusting out your Dutch sales from the UK VAT return, I would then recommend creating another balance sheet code on the Chart of Accounts called “Dutch VAT Liability”.
When you pay the Dutch authorities you can tag the payment on the bank directly to this code using the option “Something else not on the list”.
Hope that helps!
Just as a side note (it may not be a perfect fit for you)…
Another way to handle foreign VAT where you’re registered in that country would be to treat the VAT as a line on your invoice and post to a dedicated VAT nominal code (create the code using the steps above).
Here’s an example of the invoice:
You can then mark this invoice as out of scope for UK VAT and then you can easily track your Dutch VAT liability without having to make any adjustments on your UK VAT return. You can also mark the payment from the bank in the same was as described previously.
Yes, that’s very helpful indeed. The route you propose to handle Dutch Vat would be much easier than manually removing Dutch entries from our return - which is what we do at present!