Question

Post Brexit VAT codes and entry

Forum|Forum|5 years ago
March 24, 2021
1 reply
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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 ??

QuickBooks Desktop

E

EmmaM

Level 10

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.

S

skinnerneilAuthor

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 ??

S

skinnerneilAuthor

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.

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.

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