Vat Changes in Ireland after Brexit

Nice to have you in the Community space, @dmcomputing.

Allow me to share with you some insights on how to record this in your QuickBooks Desktop (QBDT).

When you purchase goods from a UK VAT-registered supplier, the VAT code that you should use is the Standard (S) VAT code as this is reclaimed from HMRC.

Same goes when you sale goods to a UK VAT-registered customer, the code you should use is S VAT code. This way, the customer will claim the VAT back in their VAT return, and we pay the VAT portion to HMRC.

To learn more about this you can utilize this link for reference: Brexit FAQ.  

As a workaround, you'll want to create a temporary VAT Change for Ireland. Then, to stay current on the latest news and updates about QuickBooks, I recommend checking our Blog page from time to time.

In addition to this, it would also best to work with an tax expert or with your accountant for further guidance in recording this. This way, we can ensure you enter your VAT codes correctly in QuickBooks.

Lastly, I’m attaching this link that you can read for guidance in filing your VAT return in QBDT: How to submit a VAT return to HMRC (MTD for QuickBooks Desktop).

Keep me posted if you have any other concerns or questions about managing your VAT. I’ll be around ready to lend a hand. Have a good one.

Hi JasroV

Thanks for the reply below. However, your answer seems to apply to UK based companies whereas we are based in the Republic of Ireland. I've also been using Quickbooks Desktop for over 10 years so am very familiar with using VAT in QB and have had to make numerous changes to VAT codes down through the years.

We have been able to use the EC codes for purchases from UK companies up to Dec but this will no longer work and we will have to report Vat separately to Revenue in Ireland for EU purchases and UK purchases. Revenue are adding more boxes to the Vat returns to capture the UK purchases. This will require changes to QB if we are to be able to use the File Vat or Vat report feature so that the correct figures can be transcribed onto the Vat returns.

I can share a couple of information about VAT codes in QuickBooks Desktop, @dmcomputing.

Yes, you're correct. You're now unable to use the EC or EU VAT codes for purchases from UK-based companies due to the Brexit impact or incident. Thus, you'll have to report VAT separately to Revenue in Ireland and another to the UK for the purchased goods or services.

For more insights, please review this article: Get ready for the Brexit impact on business.

Also, there's a temporary VAT change in QBDT Ireland wherein you'll have to create a VAT code and associated VAT items manually.

We appreciate your feedback on this one and recognize your need for this feature. Thus, I recommend visiting our QuickBooks blog page to get you in the loop about the recent news and product developments.

When you're ready, you can submit your VAT returns as you now do.

I'm still around to answer any VAT-related questions you may have. Just add the details below and I'll get back to you as quickly as I can. Take care always!

Hi Did you ever get to resolve this I am having the same problem, UK purchase that have charged 20% and I can't add a non eu vat code or vat item. 

How did you enter?

Thank you

Hello, thanks for your query regarding the new vat codes, could we ask you to call our desktop care team on 08081689535 and we'll look at your version and help get this resolved for you.

Hi

My understanding is that UK companies should not charge you vat if you are vat registered in Ireland although you may need to check this with your accountant.

I am currently on hold waiting for QB support to see how they propose to deal with recording Postponed Vat and whether QB will be upgraded to include the new reporting required on the Irish Vat return.

Hi, we have the same problem. We are using Desktop Pro 2020 and need some upgrades/additions to the VAT return boxes, we can create our own vat codes to associate with UK purchases/sales, but, the VAT return box to which we assign the vat item is missing. This will inevitably cause our vat returns to be incorrect. Will Quickbooks upgrade their software to accommodate their Irish customers who need PA1 on the vat return? Thanks, 

Hi there, Cahir20.

I can definitely see how this changes affect everyone since Brexit. 

For now, you can follow the work around shared in the previous responses. While we can't give you details when an update becomes available, you can send feedback or product suggestions to our engineers. Here's how:

1. Go to the Help menu.
2. Select Send Feedback Online, then click Product Suggestion.
3. Enter all required details and click Send Feedback. 

Always check our website where you can see all the latest updates and newly added features in QuickBooks Desktop. Here's the link: https://quickbooks.intuit.com/uk/blog/.

The Community is always here if you need anything else. 

Did you ever get the new vat codes set up, I am currently using VAT Exempt code to enter supplier invoices until it is resolved. 

Hello Acp1, 

Thanks for commenting on this post, if you have a look at this link it should help you with your issue. https://quickbooks.intuit.com/learn-support/en-uk/accounting/how-to-create-pvat-20-and-0-codes-in-qu... 

no unfortunately not, this is for UK company. I am in the republic of Ireland 

Hello, I did what you advised and sent my request online. I checked the blog also, but, this is for UK users and has nothing to offer to your ROI customers.

Quickbooks is our accounting software provider and, as such, should be in a position to update our product software to meet our requirements.

Brexit and the problems it would bring have been looming since 2016!!!  

We need to get these issues sorted as, by keeping manual records regarding UK purchases/sales, we seem to be going backwards, all our inputs and reports etc will be inaccurate going forward…..

Hello, any update on the vat return box to file vat in ROI please?

"Choose a VAT return box for VAT items

Each of the VAT items that QuickBooks sets up for you is linked to a specific box of the VAT return.

The field called VAT Return Box shows you which boxes are linked to this VAT item.

Important: Do not change the box in the default VAT items that QuickBooks sets up for you.

When you create a VAT item, you assign it to a VAT agency and a box of the agency's VAT return.

QuickBooks uses this information later to construct your VAT return”

I've just been on to support and have been asked to provide the information required in order to update the VAT return boxes. The agent was extremely helpful but it's incredulous to think that we are now in February and Intuit don't have the required changes/updates in place for Irish customers yet . I was told they were waiting on information from Revenue.......

" This is the steps on how we create the new VAT Code to comply with the BREXIT Changes

https://quickbooks.intuit.com/learn-support/en-uk/accounting/how-to-create-pvat-20-and-0-codes-in-qu...

Since you are submitting VAT 3, this new code might not be applicable, so we advise that you check with the Inland Revenue on how the BREXIT Changes is supposed to affect your report. Once you have the details on which boxes will be affected then we can manually create the codes that you need to use moving forward."

UK vat will be treated as EU vat, BUT, it cannot be entered in either E1 or E2 on the vat return.

So, in effect, it is a reverse charge.

This is how we dealt with it and it seems to work!

The vat is entered in both T1 & T2 in the vat report.

Purchases for Resale from UK: we call the vat code UP1 (UK Purchase 21 %) we will have to change this to 23% after February 28th 2021:

Vat items and groups can be duplicated (which is handy!)

Vat return box PA1 is for the purchase of goods from UK & ROW only

I haven’t issued any invoices to the UK....

Please note that this is only our attempt at getting around postponed vat accounting, and is not verified by Quickbooks

E&OE 

@Cahir20 can you explain the exact steps in doing the below please.  where do i go to set this up in QB>

many thanks

Hello,

Here's how we did it...it seems to work (for us) ...

If you already have a vat code for ROW purchases you won't need to do this at all...I found this out afterwards (as always!) However, it might be handy to know, and I will keep any/all UK transactions separate for now....

• For the new vat item

Go to 

Lists

Item List

At the bottom left click 'item' 

Then 'new'

Under TYPE click on the drop down arrow and choose 'vat item'

Then follow what we did in the excel sheet (posted in an earlier post above)

• For the new 'VAT Group' 

Go to 

Lists

Item List

At the bottom left click 'item' 

Then 'new'

Under TYPE click on the drop down arrow and choose 'vat group'

Then follow what we did in the excel sheet (posted in an earlier post above)

• For the new vat code

Go to

Lists

Vat Code List

At the bottom left click 'VAT Code' 

Then 'new'

Then follow what we did in the excel sheet (posted in an earlier post above)

This is all trial and error I’m afraid,  and,  we do not accept responsibility for any errors☹

Quickbooks has not endorsed this post..

hi @Cahir20 I am using QB Online and i can't see where to make these changes.  I can't set up another reverse charge vat code in QBO as it won't correctly reverse the VAT on the UK purchases. Are your instructions based on desktop version.  (ps what is ROW tax code?)

Hello Dan, the steps the other user has mentioned are for QuickBooks Desktop, what is it you are looking to do?The codes should be automatically set up in QuickBooks Online if you look at post vat accounting in the linked article it should  advice on the codes already in the product.

Hi DanCreat,

I am using Desktop Pro 2020, ROW is 'rest of world'

I can be corrected on this,  but I believe that PA1 on the Irish vat 3 return is nett cost of all products bought from UK and rest of world. Services received from UK and rest of world are not entered in PA1, neither are goods or services received within the EU.

I have learned that setting up vat items, groups, codes etc is a hit and miss, trial and error exercise, and I'm sorry I cannot help with QBO (I'm still trying to get my head around desktop!!)

Stay safe,

hi there - yes it's quickbooks online and it is NOT set up for the Irish method of dealing with purchases from UK that have been reverse Charged.  QB needs to come up with this urgently for online.  Can anyone assist on this???  We are an Irish company using QB online in Ireland and there doesn't appear to be any way of dealing with the recent changes due to Brexit.

Hi DanCreat,

Can you use vat codes for rest of world ...the codes you would use if  you bought something from USA or China etc.  the principal is the same I think.

Purchases from ROW were almost ignored before Brexit , but, we must now account for all purchases, or, at least this is how I understand it?

hi there - there isn't an outside EU purchase of goods code at all and you can't set up a reverse charge vat code on QB online that works correctly - you can only use the default reverse charge codes already set up.  it's just a lot of manual work every two months 

Hello DanCreat,

Have you an email address you can send me please?