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Level 2

VAT FRS Box 8 deductions

Hi all 

 

So I am on the 10% FRS and quickbooks has (when pressing submit VAT return) calculated the 10% of my gross on all invoices and states that's what I owe in VAT.

 

However, about a third of my invoices are to the Netherlands in the EU and these invoices don't have VAT on them (they are charged at 0.0% ECG). In box 8 of my return this amount (to the Netherlands) is registered but it still includes these invoices when calculating the 10% of my gross, hence it says I should be paying more VAT than I need to.

 

At what point are those invoice to the Netherlands deducted from the overall 10%? Why isn't quickbooks doing this within the software?

7 REPLIES 7
Moderator

Re: VAT FRS Box 8 deductions

Hello tobijenkins1980,

 

Welcome to the Community. I'm here to lend a hand with any questions you may have with submitting a return in QuickBooks Online.

 

For EU customers that aren't VAT registered, the applicable UK rate of VAT is charged. If you want to know more about how this reports on your return, you can visit the article below for additional reference (scroll down to EC VAT codes):

 

Common VAT Codes.

 

I also recommend visiting the VAT Detail report to make sure your transactions have the correct information.

 

Here's how:

 

  1. On the left panel, click Reports.
  2. In the search bar, type in VAT and click VAT Detail Report.
  3. Choose a date range.
  4. Click Customise report.
  5. Make the necessary changes.
  6. Click Run report.

Here's a sample screenshot for your visual reference:

 

 

In case you need more information. I'm also adding an article about how to determine if a return is correct:

 

How do I know that my VAT return is correct?.

 

Fill me in if you need any assistance about filing returns. The Community will always have your back.

Level 2

Re: VAT FRS Box 8 deductions

Hi AlcaeusF 

 

Thank you for your reply however absolutely none of it has anything to do with answering my question. 

 

What I owe to HMRC in VAT is 10% of my gross on all invoices within the UK and EU that I have charged VAT on. Now, around a third of my invoices to a company in the Netherlands who are VAT registered are charged at 0.0% ECG and these should be deducted (10% of) from what I owe HMRC as there is no VAT charged. Quickbooks, is not doing this. Why? 

QuickBooks Team

Re: VAT FRS Box 8 deductions

Hi tobijenkins

 

FRS is calculated on the 'VAT inclusive turnover', when using 0.0%ECG on your sales the figures should populate in Box 6, 1 & 8.

Level 2

Re: VAT FRS Box 8 deductions

Hi John C, 

 

Thanks for your reply. So the amount it says that I currently owe HMRC is as you said is the full 10% of my 'VAT inclusive Turnover' which includes all the invoices to the Netherlands. 

 

Box 8 does populate the amount invoiced to EU countries. 

 

So does that mean once I have actually submitted to HMRC the amount I owe will not include the 10% on the Netherlands invoices?

 

So for example and using easy numbers. Say Quickbooks has calculated my VAT return at £1000 from £10,000 earned. However £3000 of that £10,000 is invoiced to the Netherlands at 0.0% ECG. 

 

Surely what I owe HMRC will be £1000 minus £300 (10% of invoices to the EU that quickbooks is adding to the total) giving me a final balance to pay of £700

 

Quickbooks is not deducting box 8 figures from the total owed. Or is this something HMRC work out?

QuickBooks Team

Re: VAT FRS Box 8 deductions


Hi tobijenkins

 

In QuickBooks FRS is calculated, in relation to sales, from your total figures that are populated in Box 6, including transactions with a 0.0%ECG code, and the corresponding VAT element will populate in Box1, increasing the amount you owe to HMRC.The net value will also be populated in Box 8, as there is an amount in Box 8 you will also have to submit to HMRC the VAT 101 report, the list of your EC transactions.

We suggest that if you are concerned that QuickBooks is not calculating the figures correctly that you either contact an accountant or HMRC for clarification on how transactions should be calculated. If you discover that QuickBooks is calculating the figures incorrectly we will assist you in correcting the figures.

Level 2

Re: VAT FRS Box 8 deductions

Massive thanks John C.

 

I think I have a grip of it now and Quickbooks is actually showing the correct data. 

 

As there is a figure generated in box 8, HMRC will send me a EC Sales form to fill in. Then deducting that figure from the amount owed generated in Box 1. 

 

I assume then, once you have submitted the VAT form, payment isn't taken immediately as HMRC need to assess the figures.

QuickBooks Team

Re: VAT FRS Box 8 deductions

Hi tobijenkins1980

 

You have to submit the EC Sales list that HMRC send to you within 21 days if submitting it online, 14 days if submitting the paper version. I'm not too sure what the process is that HMRC undertake regarding the time frame for payment however I assume, like you, that they will do so after they have assessed and calculated the figures/amount owed.