We are trading under the NI protocol and have one invoice that is marked in QF as “EU acquisition of goods”. We didn’t pay any VAT to the German supplier, so this VAT is due.
On QF VAT returns this invoice shows up as included in Box 2, but the amount i 0. In box 4 it also shows up with 0.
Should the VAT for this invoice be included in both box 2 and box 4?
From HMRC guidance the VAT on this purchase is due:
You must include the VAT due on all your acquisitions for the VAT period in which the tax point occurs. This is the earlier of either the:
date your supplier issued you with the invoice
15th day of the month following the one that the goods were sent to you in
You may also be entitled to reclaim this amount as input VAT and do so by including the relevant figure >within the total at box 4 (but see the rules for reclaiming input VAT in [VAT guide (VAT Notice 700)]>(VAT guide (VAT Notice 700) - GOV.UK)).
Yes, the way acquisitions (and reverse charges for services) work is that you declare in QuickFile the VAT you would have paid had you bought the same thing from a UK supplier - that generally means 20% but it might not be, for example if you’re buying food products that would be zero rated in the UK.
P.S. you might want to edit the title of this post to say “EU acquisition” instead of “EU reverse charge” for anyone else searching for it in future - this isn’t a reverse charge situation, and if it were then it shouldn’t go in box 2 anyway.
Thank you. I don’t quite understand why this is not reverse charge?
This is from Avalara’s guide:
Below are some of the common examples across all EU member states of where the Reverse Charge >may be applied:
Intra-community supply of goods (when goods are sold to someone in another EU member state) to >another EU VAT registered business (compulsory in all countries)
It’s very similar to the reverse charge procedure but that technical term “reverse charge” specifically refers to how you handle purchases of services (not goods) from overseas suppliers, and involves you adding the VAT to box 1 (not 2). The procedure for buying goods from the EU to NI (and prior to this year, to the rest of the UK too) is called “acquisitions” rather than reverse charge.
QuickFile used to label the tickbox for acquisitions with the words “apply reverse charge” which caused endless confusion for people who wanted to process actual reverse charge purchases of services.