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Adil2
Level 1

VAT Code

Hi,

 

My company is operating in UK and i purchase Music course from USA open studio and the invoice which i received is in US dollar and showed no VAT.I gave it a VAT code of No VAT (0%) is that correct?

 

1 REPLY 1
paul72
Level 8

VAT Code

Hi @Adil2 

 

Personally I avoid using NOVAT as it means the transaction will not show on your VAT Return at all (& I prefer to have all income/expense transactions on there as a way to check/reconcile accounts).

 

I'm not quite sure what you mean by a music course but I'm guessing it's a Service being received rather than a purchase of Goods.

 

I've always thought that VAT on Services are a bit of dog's dinner - in general, it depends on the Place of Supply (see https://www.gov.uk/guidance/vat-how-to-work-out-your-place-of-supply-of-services).

 

In your case (if I've understood correctly that it's a music lesson or instruction course) I would go with Z=0% or 20.0% RC SG.  Both have the same effect - there is no VAT to pay - but these bring the expense on to the VAT return.

 

Hope this helps.

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