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We have not been given any information from HMRC in regards to what will happen if Brexit does or doen't proceed. Therefore until we are given further information the way VAT is recorded will remain the same.
We are in the process of creating an community article regarding Brexit which will be posted in the very near future.
We are getting V close now to Brexit and HMRC guidance is now pretty settled.
All imports to UK (whether EU or outside) will move to a postponed import VAT scenario (rather then current system for outside EU whereby VAT is paid on arrival and re-claimed on VAT return via BOX 4).
Here is the general guidance - https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return
And here is the detail on VAT return completion - https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat
It seems to me that the import VAT amount is double entered on the VAT return - value goes into BOX 1 and BOX 4 so actually net zero.
Any VAT due to HMRC will be reclaimed when goods are re-sold .
Is Quickbooks making a change so this will be managed ?
NB - I am desktop Premier 2020 user.
Hi We import goods from Austria.
We did receive a communication advising us to use PVA codes from 1st January, however from reviewing some of the links, it would appear that these codes are not currently working as they should.
Please can you confirm the correct code to use in the meantime and how we activate it?
Even though we have a deferment account set up, we are being charged and have to pay UPS or the hauliers for the VAT every time an import parcel is delivered to us so these invoices will also have to be entered onto QB.
If we also put the supplier invoice through using 20% PVA (or whatever code you advise we should use instead) then we are accounting for the same VAT twice - once when the suppliers invoice is posted and once again when the hauliers VAT prepayment is posted/paid?
Do we have to create a manual record of the VAT pre-paid upon arrival and then deduct this from the VAT due in box 5 on the VAT 100 or is there another way to account for the VAT we have already paid?
Assuming you are buying business to business and you both have VAT and EORI numbers , your supplier should not be billing you VAT on the goods invoices .
the VAT at 20% is normally levied by your import agent on arrival (I believe you can apply to defer this for 6 months but you still have to account for it so if you can afford it from cash flow , just pay it as you will have to get used to this eventually). But as you have a deferment account you shouldn’t be paying it at all ?
We have been importing from USA for over 15 years and to work around this on QB we did the following...(NB this is for desktop version). We never bothered to apply for a deferment account as seemed more trouble than it was worth.
1. Open lists/chart of accounts and set up following expense accounts if not listed... import duty , import clearance and import VAT. First two can be VAT code E (exempt). Import VAT should be code S (standard 20%).
2 . When your shipper sends you the invoice , for VAT , duties (if applicable) and other import clearance costs enter the invoice and under the expenses tab , enter the duty with vat code E , any clearance document charges as VAT code E and the import VAT make sure code is S but leave value as zero. Then click the edit VAT amount button in bottom right of screen , and on the pop up screen , enter the VAT amount in the 20% line... this allocates the full cost as VAT and will go into the correct box 4 on your VAT return as input tax.
3. Save invoice and pay it.
4. At the end of each month you should get a form C79 which details all the import VAT paid. Just check that matches up with your entries and that the import VAT has appeared in the right place in your VAT 100 report on quickbooks. Make sure you keep the C79’s forever ...
5 yes it’s all very pointless !! End result is net zero VAT!