I have been pulling my hair out over this one as , whatever I do, I cannot seem to get the VAT code set up correctly. I have received a couple of purchase invoices with No VAT charged but where the VAT code on the invoice states "reverse charge".
I have selected the RC VAT code but the transactions do not show up in the "Reverse Charge list"...Either I am being daft and should only expect to see reverse charge "sales" in this list report or else I need to either amend the current code or set a new one up.
Actually, I think I have this sorted now - the reverse charge element IS showing up correctly in the VAT100 report - it just doesn't show in the Reverse Charge list which I guess is actually just to show reverse charge SALES rather than purchases!
Thanks for your post regarding the 'Reverse Charge List' in QuickBooks Desktop.
It is indeed the case that only reverse charge sales transactions should populate the reverse charge list. So if you are using the RC code on any purchases you are entering in QuickBooks, don't worry at all if these aren't showing in your reverse charge list report; they shouldn't be.
Please see this GOV.UK link for more on the reverse charge procedure, and particularly point 11 regarding the Reverse charge list.
If you have any further questions, please don't hesitate to post back.
For construction VAT - not EC just within Ireland I want to set up a VAT code that applies the 23% to the T1 and T2 - I know it involves setting up a VAT group - can someone give me step by step I would be extremely grateful. Thanks.
Thanks for joining this thread on the community!
You are correct in a mechanical sense, in order to get either a sale or purchase in QuickBooks to post to Vat on Sales and VAT on purchases simultaneously, a VAT group would need to be made, and applied to a custom VAT code within QuickBooks Desktop.
Just so I understand what you're trying to achieve a little more, would this Vat group you're trying to create be used on Sales/ Purchases/ or both. And would it to your knowledge also populate the Net value of sales and Net value of purchases of your VAT3 report?
Thanks in advance!
Thanks Chris. Reverse charge VAT is accounted for by the principal contractor (the sub contractor charges no VAT). However when returning VAT it needs to go into both VAT on sales and VAT on purchases. Yes it would be need also to be in the net sales as it is a sale? But that information isn't required for VAT return be great if I could get T1 and T2 correct. Thank you.
Just to check as well now that you're talking about contractors and subcontractors. Are you refering to C.I.S or the construction industry scheme and the recording of payroll taxes and national insurance, or is this merely a Vat consideration?
Thanks in advance,
Thank you for clarifying that.
The ideal solution, as you have already pointed out, would in theory be to create a Vat code, where a Vat group can cause the sales transaction to post to Box T1 for sales Vat, and also to Box T2 for reclaim. Unfortunately this cannot be done in the UK version of QuickBooks desktop; A vat group cannot be attached to the sales side of a Vat code.
If you don't mind, I intend to look into this for you further in order to attempt to find a feasible workaround. I will post back to this thread once I find one.
Like the original poster I am getting very frustrated trying to make this work.
Has this issue been resolved? Can a code be created for reverse purchases that puts the amounts in all the appropriate boxes? The VAT code RC that comes with QB enters values in boxes 1,4, and 7 of the VAT return. According to a VAT expert the net purchase amount also needs to be recorded in box 6. I have tried to make this work but have had no success.
Hello there, Kim.
I suggest contacting QuickBooks Technical Support (UK) for an agent to help you with your concern. They will help you map the VAT correctly.
Here's how to contact them:
The support is open from Mondays to Fridays at 8:00 am to 8:00 pm GMT.
Do not use the RC vat code in desktop its misleading and meant for a different Reverse charge to the type you want .
Use Ess if a service or Egz for goods.
Then it all falls into place and posts correctly.
RC is not for this type of invoice use ESS or EGZ and it will all work .
The vat code are based on the historic way vat developed over years and RC was meant for the Telephone carousel system or MTCC not used for general EC trade. ESS for services EGZ for Goods is correct.
Could you please let me know if this problem has been resolved and how?
I, too, have to post a purchase invoice for services from Ireland with VAT Reverse Charge applied and I cannot find the correct VAT code in Desktop Pro so that Boxes 1, 4, 6 and 7of my VAT return are populated as required by HMRC in Notice 700/12 , para 4.6. This is even more important now MTD has arrived. I phoned customer support and spoke to someone in the Philippines who couldn't get their head round the problem. They told me to use the RC code, but using this code only populates Boxes 4 and 7 (two entries in Box 4, one +£20, one -£20 vat, resulting in a nil effect).
Please could someone tell me how to resolve this? Thanks.
Thanks for contacting us here on the community. I'm sorry to hear that you didn't get the answer you needed straight away, but the below steps will make your reverse charge purchase transactions post to boxes 1, 4, 6, and 7.
1. Click on 'VAT' on the top toolbar.
2. Click 'Vat Code List'
3.Double click on the Vat code 'Reverse Charge (Carousel/MTIC)'
4. Change the Vat Item for purchases to 'Ec Purch services 20.00% group' and click O.k.
Once changed your RC transactions will post to the correct boxes.
Thanks for your reply. I've followed your advice, BUT there are still no entries in Boxes 1 and 6 as required by the HMRC guidelines. Box 7 increases by the value of my invoice; Box shows no change as there are two entries, one + and one - for the amount of VAT.
Hello again, Oil234,
Thanks for getting back to us and validating the result.
This time, I suggest contacting our Customer Care Support Team. They have the expertise and necessary tools to help you in mapping the settings in order to map the VAT correctly.
To contact us, here's how:
I'd appreciate if you can update me on how it goes. I'm always here to help. Have a great day!