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Reverse Charge VAT

  • Member
  • Practice Licence
  • 27 posts
  • # 118057

Can anyone please help me on Reverse Charge VAT? I have a new client who raises and receives invoices working with businesses in Brussels. This is a new one for me as I need to know what VAT codes to use. I am working with Quickbooks Online so any advice would be much appreciated.

Thank you!

Tony Jackson

tony.tbsbookkeeping@gmail.com

  • Member PM.Dip
  • Practice Licence
  • 16 posts
  • # 118082

Hi Tony

I have a client who has customers and suppliers in Europe and uses QBOL. All their supplies and purchases would normally attract VAT at 20% if the transactions were within the UK.

These are the VAT codes they use for the various transactions with other points to consider

selling goods

  • Client’s customer’s VAT number should be verified and shown on the Invoice
  • VAT code in QBOL - 0% ECG (0%)
  • No VAT will be shown on invoice
  • Net value only will appear in Boxes 6 & 9 of VAT return.
  • Client will also need to submit an EC Sales list (VAT 101 in QBOL) via HMRC website as no facility yet to file via QBOL. Submit at same time as VAT return unless HMRC have requested one at a different time. 
  • Total of EC Sales list should agree to Box 9 of VAT return if submitted at the same time.

buying goods

  • Clients GB VAT number should have be given to supplier and shown on their bill
  • No VAT should be shown on the bill
  • VAT code in QBOL - 20% ECG (0%)
  • This will put the net value in Boxes 7 & 9 of VAT return & VAT in Boxes 2 & 4

buying services (reverse charge)

  • Clients GB VAT number should have been given to supplier and shown on their bill
  • No VAT should be shown on the bill but words like ‘this invoice created under the reverse charge mechanism’ should
  • VAT code in QBOL - 20% RC SG (0%)
  • This will put the net value in Boxes 6 & 7 of VAT return & VAT in Boxes 1 & 4

Selling services (reverse charge) – sorry no experience of this.

I hope this helps and that other members add their comments so you don’t have to take only my word for it!

Good luck!

 

Peter R

  • Member
  • Practice Licence
  • 27 posts
  • # 118085

Thank you Peter for your reply.

My client is into selling and buying Services so will be using 20% RC SG for buying services and 0.0% ECS for selling services. After testing it all looks to be playing out correctly.

Your advice was really helpful.

Regards, Tony

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