I am trying to prepare my accounts to file a VAT return.
I am importing items from China to UK and have to pay VAT on entry to UK.
The import of items can be broken down into two transactions:
At the moment I am categorising transaction 1 as No VAT and transaction 2 as 100% VAT. The problem with this method is that transaction 1 then doesn't show up in Box 7 "Net value of purchases".
What is the correct method to account for VAT in this case?
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So for number 1 instead of putting it as NO VAT you would put it as Exempt and that would be required to show in box 7 for you.
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