We buy goods from Spain, Italy, China & USA. Invoices are supplied with no vat. We then get an invoice from the courier showing the vat plus various handling/import fees. I can post the fees but cannot work out how I deal with the vat. I believe I have to treat it as a business expense (freight charges) with zero vat. I then do the PVA adjustment at the end of every month? Can anybody clarify please?
Thanks is anticipation
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Thanks for getting in touch. I have done some more studying and think I may have found the answer but it would be great to check that I am doing it correctly.
Let’s assume we import from China, an item worth £1000. We pay the Chinese company £1000.00 in dollars or yen, no VAT, no problems.
We then get an invoice from the courier charging various duties/taxes (no problem posting these) plus they charge the £200.00 vat which would have been on the Chinese invoice. I believe that I should post the vat figure as an expense (with no vat). Assuming this is the only import transaction at the end of the month/quarter and it agrees to the C79, I post an expense from the C79 by debiting £1000.00 plus PVA vat and then crediting the £1000.00 zero vat (this adjustment is detailed in Aaron Patrick’s video on youtube).
Is that how you see it?
Hi John, thanks for your reply - unfortunately this falls further into the realm of accountancy than we're able to assist with and we'd be unable to advise - to make sure your transactions are accurately recorded, we'd recommend reaching out to your bookkeeper or accountant if you're unsure on this, we apologise for the inconvenience. 🙇♀️