Thanks Michelle, I have already set a VAT group up with that name, but I think I've made an error when setting it up as Im still only getting a minus vat amount on purchase invoices  I cant find where to view or delete vat groups.  I think my head is going to explode!

Audrey - check our VAT code - in the taxable information make sure you in the "VAT for purchases" you have clicked on Reverse Charge Purchases GROUP  not reverse charge Item 

Thanks Michelle, you're a lifesaver.  My subcontractors vat now appears in box 4 as a minus and a plus (which cancels each other out which is correct) but are they meant to appear in box 4 together?.  

When invoicing a customer my sales figure appears in box 7.  Can you confirm if this is correct.? Sorry to be a nuisance.

Reverse VAT Postings:

SALES INVOICES :  Should show in Box 6 : Net value of invoices 

SUBCONTRACT INVOICES subject to reverse VAT

VAT element should be shown in box (1) and box (4) 

the net value of invoices should be in box 7: 

Hope of help :)

Brilliant, all sorted.  Thanks again.

I've followed the steps in the guide and in my sales invoice the VAT summary shows CRS rate 0% and 0 VAT. The legal requirement for sales invoices is to show the amount or VAT rate  which should be applied ie 20%. Am I missing something?

It's good to see you here, @ChrisD123.

Let me chime in and provide some insights about VAT in QuickBooks. 

To start, open your invoices and make sure to select the correct VAT code. This way, your VAT summary will show the correct CRS and VAT rate. 

For more information, I'll be sharing this resource for your reference: VAT Domestic Reverse Charge (DRC) for CIS in QuickBooks Desktop.

Additionally, here's how to create PVAT 20% and 0% codes in QuickBooks Desktop. This includes information about VAT codes and those UK VAT registered businesses who need to review Import VAT.

Let me know if you have other concerns with QuickBooks. I'm always around to lend a helping hand. Have a nice day ahead.

Hi,

Just to add to this thread.  How should we AUTOMATICALLY add notes to a Sales Invoice, as stated on the bottom of following page and required by HMRC (https://quickbooks.intuit.com/learn-support/en-uk/taxation/vat-domestic-reverse-charge-for-cis/00/78...

Add notes to sales invoice

When supplying a service that is subject to the domestic reverse charge, you must clearly state the reverse charge on the invoice and other VAT documents. Here are some details to include:

• Show all the information required on a VAT invoice (for example, the VAT Registration Number, date and the total amount including VAT). 
• Make a note on the invoice that clearly states the domestic reverse charge applies and that the customer is required to account for the VAT due.
• Clearly state the exact amount of VAT due under the reverse charge, or the rate of VAT if the VAT amount cannot be shown, but the VAT should not be included in the amount charged to the customer. 
• Invoices for services subject to the reverse charge must include the reference ‘reverse charge’ according to the VAT regulations 1995. 

Here are some examples of approved references that you can use:

• VAT Act 1994 Section 55A applies 
• S55A VATA 94 applies 
• Customer to pay the VAT to HMRC

Note: You can also make a note in the Customer Message box of any VAT that is applicable but not necessarily applied under the VAT domestic charge.

Currently all Sales Invoices show summary on the bottom of invoices as shown in pic below.  To be compliant either the amount of VAT  (£790.40) or the VAT rate (20%) should be shown (but not added to total invoice value):

I spoke to QB support who told me I need to remove the VAT summary from the invoice template and replace with a text box which includes the VAT rate and the Reverse VAT statement. 

@ChrisD123  Thanks for posting that solution Support gave :)

@Rubielyn_J  Whilst the solution given by Support to @ChrisD123  would work in certain circumstances (all invoices subject to CIS Reverse Charge VAT)  it would not work in the following circumstances as any text box 'text' is persistent and not easily changed:

• non Reverse Charge sales
• differing rates of VAT (zero rated / 5% / other rates)

A better solution would be for the VAT summary to show the VAT rate & Amount, ideally with the required text included also (VAT Act 1994 Section 55A applies  / S55A VATA 94 applies  / Customer to pay the VAT to HMRC)

Hi I have set up new VAT Codes for Domestic Reverse Charge as shown in Desktop but when I enter a subcontracor invoice the VAT shows as a debit in both box 1 and box 4 of VAT Return, is this correct as it does state -20% so I thought it should be a credit in Box 1.  Can anyone help.

Hello Choicie, can you ring the support line for desktop on 0808 168 9535 and the agent will be able to set up a screenshare with you and they will be able to have a look and see what is going on  in your account for you.