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buzz6
Level 1

VAT

We have recently starting importing goods from China and would like to check we are entering the data properly

So for entering the bill for the purchase of the goods should I select No VAT from the Amounts are or select Exclusive of TAX. If I select No VAT I assume that this doesn't then add the purchase on the VAT return.

Once we get the goods we receive a bill for the duty from Fedex and as we are VAT registered we can claim the VAT back. So in the bill I would enter :-
Amounts Are box Exclusive of TAX
Category details  -
one line for the duty with 0% Z

another line handling fee 20% S (there is VAT charged on this)
under the subtotal at the bottom would enter the amount of the VAT that we are charged on the goods (as I said we are VAT registered and can claim this back)

Hope that all makes sense and is this correct

 

2 REPLIES 2
paul72
Level 7

VAT

Hi @buzz6 

 


@buzz6 wrote:

We have recently starting importing goods from China and would like to check we are entering the data properly

So for entering the bill for the purchase of the goods should I select No VAT from the Amounts are or select Exclusive of TAX. If I select No VAT I assume that this doesn't then add the purchase on the VAT return.


 

Personally, I wouldn't use NoVAT because it doesn't post the amount to the VAT Return.  Strictly, it's probably correct (Outside the Scope) but I like to have VAT report totals matching sales/purchases totals from other reports.

I have an Import/Export VAT Code set up for this but it does the same as the Exempt or Z=0% codes.

 


@buzz6 wrote:

Once we get the goods we receive a bill for the duty from Fedex and as we are VAT registered we can claim the VAT back. So in the bill I would enter :-
Amounts Are box Exclusive of TAX
Category details  -
one line for the duty with 0% Z

another line handling fee 20% S (there is VAT charged on this)
under the subtotal at the bottom would enter the amount of the VAT that we are charged on the goods (as I said we are VAT registered and can claim this back)


 

Again, this does the job but I prefer never to adjust the Subtotal/VAT unless absolutely necessary.  If someone's reviewing later (think VATman), it's difficult to see what's been done & why.

 

My preference is to add two lines to create the Import VAT:

Line (1) an amount equal to 5xVAT (so that using S20% code gives the correct VAT)

Line (2) minus the same amount with Z=0% code, so that just the VAT remains.

 

Hope this helps.

buzz6
Level 1

VAT

Hi Paul72

Thanks for your help, it gives me confidence that what I was thinking is along the right lines.

 

I did think using the Exempt or Z would be the best option as you say it then posts to the VAT return.
In the Duty bill I was going to put in the description the invoice / Waybill number of the purchase it relates to so that this could be tied together but will definitely look at you suggestion. 

 

Thanks

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