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Anonymous
Not applicable

20.0% RC SG vs 20.0% ECS

Hi All

 

There seems to be lots of confusion regarding the differences between 20.0% RC SG and 20.0% ECS. According to this article, both do exactly the same thing: https://community.intuit.com/articles/1763803-common-vat-codes

 

Now I've read elsewhere that there is a difference between the two VAT codes (something about box 6) so should the above page be updated?

 

I've read other articles that says the RC SG code is used for the purchase of mobile phones (isn't that what the MPCC code is for) and other articles that say it's outdated so never use it. Has QB or anyone else written a recent article explaining these codes more clearly?

 

I'm using ECS but I am interested to know what RC SG does differently and if it is actually required.

 

Thanks, Nick

Solved
Best answer 01-29-2019

Accepted Solutions
Anonymous
Not applicable

Re: 20.0% RC SG vs 20.0% ECS

Hi Edward, I've spoken to our accountant's QB's specialist. They agree with HMRC that the RC SG code should be removed from QBO as it's a duplication that serves no purpose.

 

I would suggest that Quickbooks should contact HMRC for verification of this and update this post accordingly.

 

Thanks, Nick

View solution in original post

14 REPLIES 14
Moderator

Re: 20.0% RC SG vs 20.0% ECS

Hi @Anonymous,

 

Glad to know that you're looking into our articles and checking posts to look for answers.

 

Let's clarify things out. Since your query is about the RC SG, I'll assume we are talking about purchases. There are several qualifications on to when you can use each VAT Codes for UK, for the question on what VAT code to use on your transaction I highly suggest to talk to an accountant or check this with HMRC.

 

I'll show you what boxes for the 2 VAT codes in question, check details below.

 

For the 20% RC SG, this VAT codes for purchases affect the Box 1, 4, 6 & 7.

The  20% ECG affect the Box 2, 4, 7 & 9.

 

This means you are correct in saying that there is a difference on this 2 VAT codes specially in Box 6 and I replicated then saved some screenshot to show how it works in QuickBooks Online.

 

VAT 20% RC SG expense transaction

 

VAT Return for 20% RC SG VAT Code.

 

Here's for the 20% ECG.

 

20% ECG expense transaction.

 

VAT Return for 20% ECG.

 

The 2 Vat code's difference shows for the VAT amounts are boxes 1 and 2, whilst the Net amounts are Boxes 6 and 9. They both show in Boxes 4 and 7.

 

Drop me a comment for further query I'll be glad to get back to you.

Anonymous
Not applicable

Re: 20.0% RC SG vs 20.0% ECS

Hi Aphylis, thanks for your reply but I think you misread my post. I was asking about RC SG vs ECS not ECG.

 

Cheers

Moderator

Re: 20.0% RC SG vs 20.0% ECS

Hi @Anonymous,

 

For the RC SG and ECS, they are posting the same Boxes in the VAT return but there are certain criteria on when to use the ECS and when to use the RC SG.

As for the ECS this VAT code is usually use for the transaction conducted to EU for services and regards to RC SG usually for Reverse charge for Services and Gold.

 

I highly recommend speaking with an accountant to determine which VAT code should be used for the purcahses made, to make sure that we accurately report to HMRC.

 

 

Anonymous
Not applicable

Re: 20.0% RC SG vs 20.0% ECS

Hiya

 

I'm just interested to learn what RC SG is for. I would expect HMRC to have a definitive list of when to use this code.

 

Also, if they post into the same boxes then how would HMRC be able to tell that a user has selected RC SG? I am intrigued by this so would appreciate any further clarify as I haven't been able to find this online.

 

Thanks 

QuickBooks Team

Re: 20.0% RC SG vs 20.0% ECS

Hello Devil,

 

I have found this link on gov site which may help with your questions in regards too the Reverse Charge Services code.

 

https://www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-abroad

 

Please let us know if this answers your question.

 

Thanks,

 

 

Anonymous
Not applicable

Re: 20.0% RC SG vs 20.0% ECS

Hi Edward, unfortunately that link doesn't help explain why Quickbooks has two VAT codes that both appear to do exactly the same thing. I'm wondering if anyone actually uses RC SG or is it now a redundant code that should be deleted?

QuickBooks Team

Re: 20.0% RC SG vs 20.0% ECS

Hello

 

Thanks for your Question

 

It is not a redundant code as HMRC still recognises the code, other accountancy software still use this code as well.You are right they hit the same boxes, though they do have slightly different definitions at HMRC  as to when to use them based on whether it is an eu or non eu acquisition /sale

 

HMRC currently can not see the code you are using when you file with them, they see the figures against the boxes.If you were audited Quickbooks would have the digital imprint of the original codes used against the transaction and that is the reasoning behind making sure you are using the correct code.

 

It is worth reaching out to HMRC if you need to know which code to use as we are not trained accountants and therefore we can not advise which code to use.However we can advise how the Quickbooks allocates that code

 

Kind regards

Emma

 

 

 

 

Kind regards

 

Emma

 

 

Anonymous
Not applicable

Re: 20.0% RC SG vs 20.0% ECS

Hi Emma, thanks for your reply. I may contact HMRC out of curiosity unless there is someone on here (maybe an accountant) that can confirm what RC SG is used for.

QuickBooks Team

Re: 20.0% RC SG vs 20.0% ECS

The HMRC will be the best people speak with unless as you mentioned another member of the Community can provide the answer.

 

Thanks,

 

 

Anonymous
Not applicable

Re: 20.0% RC SG vs 20.0% ECS

Hi Edward, I've just spent 20+ minutes on the phone to a really helpful chap at the HMRC VAT office.

 

No one there has any idea why QBO has two different VAT codes that post into the same boxes. They also don't understand why Quickbooks are advising customers to call them to obtain an explanation of what your various VAT codes do.

 

So what now?

QuickBooks Team

Re: 20.0% RC SG vs 20.0% ECS

Thanks for getting back to us in regards to your VAT codes.

 

We understand and agree the RC SG and 20% ECS populate to the sames boxes on your VAT return however both codes apply to different types of transactions. For further clarification we would suggest speaking with an accountant who can advise of which scenarios the relevant codes apply too.

 

 

Anonymous
Not applicable

Re: 20.0% RC SG vs 20.0% ECS

Hi Edward, okay I'll do that tomorrow but I'm expecting the same response from them too.

Anonymous
Not applicable

Re: 20.0% RC SG vs 20.0% ECS

Hi Edward, I've spoken to our accountant's QB's specialist. They agree with HMRC that the RC SG code should be removed from QBO as it's a duplication that serves no purpose.

 

I would suggest that Quickbooks should contact HMRC for verification of this and update this post accordingly.

 

Thanks, Nick

View solution in original post

QuickBooks Team

Re: 20.0% RC SG vs 20.0% ECS

Hi Devil

 

All of our customers, accountant users and business directors have an opt to "turn off" any code they don't want to use. They also have the option to create additional codes as required.

 

We want to manage your expectations properly, with all the changes coming about with MTD, and no doubt further complicated with Brexit - i expect there to be some changes to our codes in 2019.

 

I'd encourage you to formally log your feedback on the link below - it's our hub for product ideas, changes or updates. It's where our developers are going to look for customer driven ideas and changes:

https://feedback.qbo.intuit.com/

 

Thanks,