How to set up Domestic Reverse Charge VAT codes correctly

Hi there, AngusK1.

To ensure the Domestic Reverse Charge VAT codes are set up correctly, we kindly request that you contact our live dedicated support team. As part of our security protocol and to ensure the protection of your account, we will need to verify your account-specific details. They're equipped with tools to check the cause. It'll also allow them to submit a ticket to our engineering team to alert them about the issue if necessary.

You can directly contact our Live QuickBooks Support Team using this phone number: 0808 234 5337. Our help is available from 8 AM - 7 PM, Monday through Friday. You can also message them live Monday to Friday, 8.00 AM - 10.00 PM, and Saturday & Sunday, 8.00 AM - 6.00 PM.

Should you have any more questions about working on your books, please don't hesitate to keep us posted. I'm here to support you and will keep this conversation open for your convenience.

I'd really perfer instructions within this forum, please.  It is really not convenient for me to contact Support as they do not seem to provide support for QuickBooks Desktop.  Would you be so kind as to provide the information I require here?  that way it may also help others who are also facing this probem and save duplication of effort.

Many thanks.

Angus

Tracking VAT for companies that operate within the construction industry can be a little tricky, Angus. Allow me to share details about tracking reverse charges in QuickBooks.

First, I want to inform you that as of April 2024, we've officially discontinued QuickBooks Desktop UK. This means that the software will no longer receive critical updates, including changes to important tax guidelines. This is also why our phone support teams no longer provide assistance for QuickBooks Desktop.

Given the current circumstances, we strongly recommend you switch over to QuickBooks Online or explore alternative accounting solutions, especially if you need to track VAT and meet MTD requirements.

Let me share this article for comprehensive details about the discontinuation process:  QuickBooks Desktop discontinuation support.

Second, two VAT codes have been added to account for the tax in relation to tracking Domestic Reverse Charges. One is 20%, and the other is 5%.

Once theses codes are used in a transaction, QuickBooks will automatically account for the reverse charge. The VAT amount will also be reflected on your VAT return.

You're also correct that purchases VAT is coded to Box 1 and Box 4, while net purchase is reported to Box 7. On the other hand, sales transactions are coded to Box 6. You can read more details about this here: VAT codes in QuickBooks Online: A complete guide.

Please note that while this article is categorized under QuickBooks Online (QBO), the guidance is equally applicable to QuickBooks Desktop (QBDT).

In addition, I would recommend reaching out to your accountant for additional advice about tracking VAT and CIS-related transactions.  

Allow me to give you this article for more details in case you're interested in switching to the online version: Find out how your books will move from QuickBooks Desktop to QuickBooks Online.

Please don't hesitate to contact us again if you need further assistance. Whether it's regarding VAT collection or recording other types of transactions in QuickBooks, we're always ready to support you.

Thank you for the support, jenop2.  I understand about the discontinuation of QBD, but QBO just doesnt work for me.  I have too many nested items and the process did not let me transfer historical records, etc, etc, etc.  It is a well exercised argument and so I am continuing as best I can with what I can.

Thank you for the link to the article.  It clarified what I needed to know in principal but without the explanation of how I go about creating it within QBD (I am aware that with QBO there is just a toggle switch to enable these VAT codes to be implemented, but in QBD it has to be done long hand).

So, in order to create the correct VAT code for the 20% DRC I have created two new VAT items, but when I configure those VAT items I see that it only allows me the potential of adding VAT transactions to two boxes within the VAT return and not 3.  Do I have to create a VAT group which will itself contain two items?  If that is correct would you mind giving me some steps to follow?  Can I copy the methods used to the RC code which already exists (described as 'Reverse Charge (Carousel/MTIC)') and which does make use of VAT groups?  If I need to have a composite VAT group which adds figures to boxes 1, 4 and 7 do I create one VAT item to add figures to boxes 4 and 7 and another VAT item to add to box 1, and then include both of those VAT items in a VAt group to achieve what I need?

Thanks in advance.

Angus

Hi Jenop2,

Please can you have a look at the follow-up questions I asked 3 weeks ago and provide me with a little more information as to how I go about achieving what I need to achieve?  You sound like you really know what you are talking about, so hopefully you'll be able to help.

Best regards,

Angus