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RosieC
Level 2

Import VAT - PVA

Hello

As its now Jan 2021 i understand i need to deal with the deferred VAT on imports differently than before.

I have added the PVA vat codes into QB

But I have a DHL invoice for VAT for goods imported & i don't know how to add it to QB

I don't need to pay anything, but I do need to record it on my VAT return

How should i enter the invoice into QB?

Thanks

Rosie 

22 REPLIES 22
DivinaMercy_N
QuickBooks Team

Import VAT - PVA

It's nice to have you here in the Community, @RosieC. Let me share some steps so you can record your invoice in QuickBooks.

 

You'll need to enter an amount (0.01) in two line items. The other one should enter as negative so it will offset the amount. Add a tax code on the first 0.01. Then, set the negative amount as No VAT. Once finished, enter manually the VAT amount in the sales tax field. Ensure to input all details before manually entering the sales tax.

 

With the suggested steps above, I still recommend consulting your accountant to ensure you'll record your transactions accurately. They can give you some advice you can make and guide you with the process. If you're not affiliated with one, you may use our Find a Pro-Advisor tool to look for an accountant near your area. 

 

Also, to more about common VAT codes set up by QuickBooks, please see this article: VAT codes and rates.

 

You might also want to visit our help page to browse articles that can guide you with your QBO tasks. To get started head to our QBO help articles at this link.

 

Don't hesitate to post here again if you have further questions about adding your invoice in QuickBooks. I'm always here to help you in any way I can. Have a wonderful day ahead.

RosieC
Level 2

Import VAT - PVA

Hi

Many Thanks

I have tried to follow your guide, but the VAT field at the bottom of the bill under the subtotal is not editable when using the PVA vat codes??

If I choose a standard 20% tax code then I do get a box that allows me to enter the VAT as required however the whole point of this new PVA code is to log the import vat

Any further assistance would be appreciated

Thanks

Rosie

 

MaryJoyD
QuickBooks Team

Import VAT - PVA

Thank you for the response, @RosieC.

 

When you set the 20.0% PVAT, this will show on your VAT return. You'll see them posted to boxes 1, 4, and 7 on your VAT return. 

 

You can't edit it because PVA gives you the option to account for and recover VAT on your imported goods using the same VAT Return form.  It also means you won’t have to pay your VAT upfront and recover it at a later date, which will help you manage your cash flow. 

 

Box 1 - Includes the VAT due in this period on imports accounted for through postponed VAT accounting.

Box 4 - Includes the VAT reclaimed in this period on imports accounted for through postponed VAT accounting.

Box 7 - Includes the total value of all imports of goods included on your online monthly statement, excluding any VAT.

 

You can always check this article for more information: 

Let me know if there's anything that I can help with. I'm always here to assist. Have a wonderful day!

RosieC
Level 2

Import VAT - PVA

Hi

Sorry i'm still not sure i understand. 

I'm not a trained accountant, i'm just trying to get my head round how to enter the invoices properly for our company imports. 

How do I enter a VAT only invoice for import vat from China or France?

If I don't have to physically pay it and I can't edit the VAT box using the PVA codes then how do I stop the invoice sitting there waiting to be paid?

Sorry if this is obvious to everyone else.

Rosie 

 

Ashleigh1
QuickBooks Team

Import VAT - PVA

Hello RosieC, 

 

You will need to Speak to HMRC for the VAT  and you can use the old EC codes for certain things but you will need to speak to HMRC or a trained accountant who will be able to advise you on the codes to us as we are just technical support not trained accountants. 

ekskdjsSY
Level 1

Import VAT - PVA

Hi Rosie, did you get this to work in the end? We are having similar issues. 

AB UK
Level 2

Import VAT - PVA

The PVAT codes do not work as they should (or at all). For example, if you import goods with a customs value of £1,000 and apply the PVAT 20% code, there should be two VAT lines:

 

VAT @ -20% on 1,000.00 = £-200.00

VAT @ 20% on 1,000.00 = £200.00 

 

The net VAT payable on the expense/invoice should therefore be zero. In this example, the expense invoice total would be for £1,000, not £1,200.

 

In the VAT return, this should equate to:

  • Box 1 – VAT due on sales and other outputs: £200.
  • Box 4 – VAT reclaimed on purchases and other inputs: £200.
  • Box 7 – Total value of purchases and all other inputs excluding any VAT: £1,000.

 

See: https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat

 

It is frustrating that Quickbooks haven't got this right. It can't be that difficult, as it is similar to the way the ECS VAT code works. Some of us have VAT returns due soon - this needs fixing URGENTLY.

 

Ashleigh1
QuickBooks Team

Import VAT - PVA

Hello AB UK, 

 

Thanks for Commenting on this thread, 

 

We are aware of the PVAT 20% there is an investigation on this that we are working on. 

 

the workaround is

 

1. use the 20% RC MPCC code, and note the transaction to change back to the correct code once resolved 

 

2. use No VAT, and note the transaction to change back to the correct code once resolved, and to create an exception if required. 

AB UK
Level 2

Import VAT - PVA

Thank you for your quick response and suggesting the workarounds. We had previously raised this issue with Quickbooks support, but no-one had suggested the workaround. I can confirm that the first workaround does exactly what that PVAT code should do.

 

Slightly puzzled as to why it is taking so long to fix the PVAT code - surely Quickbooks could just copy the RC MPCC code - but I guess that's why I am not a software engineer!

elaine1963
Level 1

Import VAT - PVA

I have selected the 20%PVAT code but it does not work correctly and will not save the bill.  The vat shows as a single figure, not reversing it.

elaine1963
Level 1

Import VAT - PVA

I have selected the 20%PVAT but it doesn't work, it will not save the bill and does not show the vat correctly.  I have tried the RC code for a short term fix but this then appears in Box 6 on the VAT as well.  What do I do please?  VAT return due imminently!

ekskdjsSY
Level 1

Import VAT - PVA

when is this gong to be rectified. we have a VAT return due on Friday. 

Starting to consider changing to XERO or Sage- this needs sorting asap

AB UK
Level 2

Import VAT - PVA

You need to use the 20.0% RC MPCCs code - the other RC codes don't work for this. It may be inactive. If you don't see it in the menu of VAT codes, go to Taxes > VAT > Edit VAT < Edit rates. Click the cog wheel and select "Include inactive" then switch on the 20.0% RC MPCCs code.

john5555
Level 1

Import VAT - PVA

I thought if you are on Postpone VAT account (https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return#using-someo...)

tax code would do the following:

 

(Purchased in Italy and paid £1,000)

 

increase Box 7 by £1000

increase Box 1 or 2 by £200

 

and pay £200 when you will submit your vat return as usual.

 

any thoughts?

 

 

PS. MPCC tax code does it differently of course and wont be suitable for "postponed VAT accounting" in this case.

AB UK
Level 2

Import VAT - PVA

You won't actually cash pay any VAT because (for most businesses) you reclaim the VAT on purchases in Box 4 of the VAT return: https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat

 

So your entries would be (assuming you are not acquiring goods in Northern Ireland from the EU):

Increase Box 7 by £1000

Increase Box 1 by £200

Increase Box 4 by £200.

 

I am not a tax adviser, so please take your own tax advice (but the above is what we are doing and what the HMRC doc linked above says you do).

 

 

MarcinMa
Level 1

Import VAT - PVA

The workaround suggested by the Quickbooks team does not work for VAT FRS customers.

 

If you try to use code suggested it actually reduced VAT payable to HMRC.

 

This is yet another failure of Quickbooks to deal with VAT FRS. Same lack of support or concern can be seen in sale of capital assets under VAT FRS - not supported by Quickbooks.

marlocu13
Level 2

Import VAT - PVA

I'm very confused by all this. Has anyone figured out how to enter a PVA only, no NET amount,  just VAT value? I'm unable to edit the VAT amount, so the work around suggested doesn't work either. I have my PVA Statements from HMRC, but I don't know how to enter them, as an expense? Do I create a new customer and enter them as a bill? Whichever way I do it, PVA code doesn't revert the VAT amount as it should, and doesn't let me edit it...nightmare!!

 

When is this problem going to be fixed? QB, we need answers urgently! 

AB UK
Level 2

Import VAT - PVA

What do you mean by "PVA Statements from HMRC"? Do you mean the green Form C79? If so, it sounds like you have actually paid the VAT at the point of import, rather than postponed VAT.

 

If that is the case, this is how we do it:

 

We have a "Supplier" called Import VAT. When we pay Import VAT, we create an Expense with two lines:

 

Line 1: Category (our stock category - don't think it matters too much what category you use, as long as it is the same for both Line 1 and Line 2)

Line 1: Amount: The value of the goods. This will appear in Box 7 of your VAT return.

Line 1: VAT 20.0% S

 

Line 2: Category (see above)

Line 2: Amount: MINUS/NEGATIVE The value of the goods used in Line 1

Line 2: No VAT

 

This gives you a zero subtotal. You can change the VAT amount if you need to. The VAT amount will appear in Box 4 of your VAT return.

marlocu13
Level 2

Import VAT - PVA

No, I don't mean the C79. It's the new postponed VAT Statements. Thank you for taking the time to reply, but your solution does not relate to the issue with the PVA 20% new tax code as the PVA needs to show in box 1 and 4, not only 4. There is a bug in QB and we are currently unable to use it as it does not do what it's meant to do. The issue was reported months ago and still not fixed, hence the need for a work around. Thanks for the idea of creating a new supplier as "Import VAT" , that could work, cheers! 

 

The puzzling thing is the time QB are taking to fix the problem.

Thanks!

AB UK
Level 2

Import VAT - PVA

Sorry, misunderstood. This is what we do for Postponed VAT. Create an expense with two lines:

 

Line 1: Category (our stock category - don't think it matters too much what category you use, as long as it is the same for both Line 1 and Line 2)

Line 1: Amount: The CUSTOMS value of the goods (this should be on the import documentation).

Line 1: 20.0% RC MPCCs (as a proxy for the PVA code which still does not work).

 

Line 2: Category (see above)

Line 2: Amount: MINUS/NEGATIVE The value of the goods used in Line 1

Line 2: No VAT

 

This gives you a zero subtotal. Unlike my previous example, you can't change the VAT amount, so if it does not match the amount on the HMRC statement then you need to tweak the customs values in Line 1 and Line 2 until you get the right VAT amount.

marlocu13
Level 2

Import VAT - PVA

That's a great idea, thank you! I will try using the Reverse charge code instead and enter it as an expense, hopefully the problem with the PVA code gets sorted soon. Thanks for the advise Smiley Happy

 

AB UK
Level 2

Import VAT - PVA

No problem. We have a February financial year/VAT quarter end, so we had to work this out a month earlier than those with a March VAT quarter.

 

For the benefit of others reading this, until Quickbooks fix the PVA code it is important to use the 20.0% RC MPCCs VAT code and not any of the other reverse charge codes because they won't populate the right boxes on the return. If you can't see it you may have to unhide it in Taxes>VAT>Edit VAT>Edit Rates. And I am not a tax adviser - please take your own VAT and accounting advice!