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skinnerneil
Level 3

Post Brexit VAT codes and entry

Confused about post Brexit VAT codes and entries... QB Desktop Premier 2021. 

 

We have imported goods from USA for years - the supplier invoice is entered (in US$) with VAT code E (0%). We pay VAT and duty to air air shipper on arrival - VAT amount gets posted to box 4 . 

We claim back in VAT return. 

Net Zero.

Nice and simple. 

 

Post Brexit - I had assumed goods coming in from EU would be treated the same way - but so far we have not been presented with any VAT bills on arrival.  I assume all the importers assume we want to do the postponed VAT thing (I would rather not thanks).

I am entering my suppliers bills also as VAT code E (0%). 

So purchase value is recorded in total net purchase value on VAT return - box 7. 

But nothing in any other boxes. 

 

Now I got (2 months after it arrived) a document today from FedEx for the VAT value on one shipment from France - nothing to pay but presumably I have to account for this?

 

Seems all rather pointless... I have to put this VAT amount so its recorded in boxes 1 and 4 - so just cancels itself out... Cant I simply ignore doing this ?!! 

 

If I have to record it - how ??

7 REPLIES 7
EmmaM
QuickBooks Team

Post Brexit VAT codes and entry

Hello Skinnerneil, What boxes are you wanting to hit? If you do not feel the post VAT accounting applies you could maybe use a reverse charge code , though that would hit boxes 1 and 4, it may be worth confirming with an accountant or HMRC for guidance on which is the best code for you to use.

skinnerneil
Level 3

Post Brexit VAT codes and entry

A specific example raised itself today.

 

We have a shipment of products just arrived in from France.

Supplier invoices total € 45926.04.  I have entered into QB using code E (0% VAT).

That value is entered only onto VAT box 7 on QB (converted to sterling) - total net value of purchases.

 

Our importer did the paperwork for clearance - VAT to pay was £ 7943.88.  But this value is IMMEDIATELY offset under the postponed VAT system by the same value credited back (all linked to our EORI number apparently).  So net zero VAT.  Goods arrived . Nothing to pay.

 

The official HMRC advice is here - https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat

 

That says the VAT figure should be entered into Box 1 (sales VAT) and box 4 (purchase VAT). 

Thus cancelling each other out.

 

My point is how do I enter this ?  I do not have a bill ??  Journal entry ??

EmmaM
QuickBooks Team

Post Brexit VAT codes and entry

Hello Skinnerneil, You could enter as either, what happens when you use the reverse code does it not show as affecting the boxes as you want? we can take a look at this in more detail if you call us on 08081682535 and we can do a screen share with you.

skinnerneil
Level 3

Post Brexit VAT codes and entry

Not sure reverse codes are what we are after ... doesn't that apply to the building trade?

 

You need to please offer some guidance here on what your customers need to do.

A forum is not really where this should be discussed - we also run SAGE 50 accounts in another business and their guidance in this is MUCH better than QB...  I do feel sometimes that desktop QB users are a bit abandoned...

 

We should (in theory) at some point be able to access a monthly statement of postponed VAT via the .gov website.

Once we have those figures - we need to place the value into boxes 1 and 4 on our VAT return.  

So we need a wizard or firm guidance on authorised method.

Thousands of your customers will be facing this.  Have you fixed in the online version?

 

For now I will post journal entry to VAT control on balance sheet.

PVA amount credited to VAT Item SALES (BOX 1)

PVA amount debited to VAT Item PURCHASES (BOX 4).

 

I have tested this with a nominal £ 100 and it increased BOX 1 and BOX 4 by £ 100 thus cancelling each other out.  It did not affect any other boxes

 

sr1962dl
Level 2

Post Brexit VAT codes and entry

Hi, likewise trying to do the same thing and I understand that QBO are working on a fix for this.

 

I believe that you have to enable the PVA VAT codes first however, I'm also trying to use your work round by way of a journal but for some reason it is not posting in the VAT return.  I should be able to see it in Box 1 & 4.

 

Likewise, I believe that the PVA VAT rate (in this case 20%) should also show but if I select it a VAT rate then it calculates the VAT on the amount I want to post ... which is totally wrong.

 

I'm obviously doing something wrong here but can't work it out.  QBO need to get this resolved ASAP.

skinnerneil
Level 3

Post Brexit VAT codes and entry

Are you on desktop or online ?

My workaround is for desktop (Premier 2021). 

 

I did not activate any PVA VAT codes ?...

 

I simply posted a journal with the import VAT amounts so it posts the VAT value to box 1 and 4 on my VAT100 report... 

 

See screenshot attached.

sr1962dl
Level 2

Post Brexit VAT codes and entry

Thanks, we're on QBO.

 

Thanks for the screenshot and will have a look.  Don't know why QB can't sort this out, in Xero there is an option to add in these adjustments when viewing the VAT return.

 

Incredibly frustrating!

 

 

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