Does the input VAT on EC reverse charge purchases show twice in the VAT reclaimed on purchases?

rhia-irvine-wpo- · ‎March 16, 2022

This is how it shows on my VAT detail reports and therefore would re-claim twice instead of showing in both input and output with a £0 net effect.

paul72 · ‎March 18, 2022

@rhia-irvine-wpo- wrote:
... Not sure whether this VAT code was one set as standard by Quickbooks or whether we added this ourselves but it doesn't allow me to edit. Any ideas?

If it's a QB default code, I don't think they can be edited.

If it's one you created (which may be the case if QBO doesn't have a Irish setup), you should be able to edit - go to TAXES then EDIT VAT (in top right) the EDIT RATES.

@rhia-irvine-wpo- wrote:
... When I run the return on Quickbooks, the VAT appears twice in Box 4, thus we would reclaim the VAT twice. The net appears in Box 9, just once, which I believe is correct.
I think that one of the transaction lines for the VAT should be in Box 2 and then this would have a net effect €0 on the return overall.

That's certainly how it should work - to give overall zero balance.

@rhia-irvine-wpo- wrote:
... I can see a Reverse Charge sale we have made and that looks to be in the correct boxes.

When using the QBO default codes, this would be a different code (0.0%ECG).

View solution in original post

jamespaul · ‎March 16, 2022

Hello, Rhia.

I'll share an overview on how the data is reflected in the VAT Detail report.

Depending on the VAT codes used and how you recorded the transaction, the VAT Detail report shows the data twice. This is normal since the report will always list the boxes affected by the transaction and the codes.

If the report shows the incorrect data, I would recommend editing the transaction and changing the VAT codes to the correct ones.

If you want to know more about the VAT codes and how they affect the VAT Detail report and the boxes, you can check this article: QuickBooks VAT codes.

Ready to submit your VAT returns to the HRMC? This article will guide you through the process: Submit a MTD for VAT return to HMRC in QuickBooks Online.

Do you need to record other tax-related transactions? Please let me know the details below. I'll also help you with reports, lists and other things in QuickBooks. I'll see you soon.

paul72 · ‎March 17, 2022

Hi @rhia-irvine-wpo-

You may need to explain which VAT boxes the amounts are showing in.

Also which VAT code(s) you're using.

20.0% ECG should create +/- 20% VAT entries in Box 2 and 4, with the +/- Net Purchase entries in Box 7 and 9.

20.0% ECS should create +/- 20% VAT entries in Box 1 and 4, with the +/- Net Purchase entries in Box 6 and 7.

As an aside, unless you're in NI you shouldn't be using EC VAT codes after January 2021.

Hope this helps.

rhia-irvine-wpo- · ‎March 17, 2022

Hi Paul

It is actually an ROI company I was dealing with for this. Invoicing (services) between them and intercompany entities in France and Sweden so all within the EU. We have used a VAT code EC Reverse charge, the rate in Ireland is 23% and this is for a purchase.

When I run the return on Quickbooks, the VAT appears twice in Box 4, thus we would reclaim the VAT twice. The net appears in Box 9, just once, which I believe is correct.

I think that one of the transaction lines for the VAT should be in Box 2 and then this would have a net effect €0 on the return overall.

I can see a Reverse Charge sale we have made and that looks to be in the correct boxes.

I think the issue is the configuration of the VAT code in the return but I do not know how to correct this. Not sure whether this VAT code was one set as standard by Quickbooks or whether we added this ourselves but it doesn't allow me to edit. Any ideas?

Thanks

Rhia

rhia-irvine-wpo- · ‎March 17, 2022

Thank you James. I received some similar information yesterday using the online chat but this explanation of the individual codes is helpful. I think perhaps the code we are using was one we set up ourselves and is not quite right.