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Experienced Member

Supplier not registered for VAT - which VAT code?

Hi  Can someone please clarify, where you have a UK supplier that is not registered for VAT (e.g. because they are too small), which VAT code do I use when posting the invoice?  Some are for items like food (which would be 0% even if they were registered and others are for items which would normally be 20%).  I think it should probably be "exempt - no vat" on the grounds that the supplier is exempt from charging VAT.  However I searched and other people seem to be classing it differently.  Please can someone clarify the correct VAT code for these "Not registered for VAT" supplier invoices?

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Best answer 08-30-2017

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Established Community Backer ***

Re: Supplier not registered for VAT - which VAT code?

Typically, the Exempt - no VAT code is applied for businesses that are exempt. Since special rules apply to such businesses, it's best to check on HMRC's website to be 100% sure. Here is the link again: https://www.gov.uk/send-vat-return. 

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Established Community Backer ***

Re: Supplier not registered for VAT - which VAT code?

Hi CathyA, 

 

There are several VAT codes, and I'd be happy to clarify when they should be used. 

 

The Exempt - no VAT code can be used on goods and services that are exempt such as some insurance, some services for doctors/dentists, and some types of education/training. Special rules do apply for businesses that are exempt or 'partly exempt', so I recommend going to HMRC's website for those details. 

 

Please let me know if this helps, or if you're able to find the info you need from the HMRC website. Thank you for your time. 

Experienced Member

Re: Supplier not registered for VAT - which VAT code?

Hello

 

Thanks for the reply.  I understand that there are various codes for 0%/No VAT but it is just this one scenario that doesn't seem to fit any category perfectly.  Basically we have some small suppliers who are not registered for VAT.  If they were registered, then some of the items they supply would be Vatable and others, like food, would not.

 

My choices are Z - 0% (Zero rate VAT) - e.g. most foodstuffs that are vatable but at a 0% rate.  This doesn't seem like the right category as the items aren't 0% VAT, they don't have any VAT.

 

Exempt - No VAT - which as you say is usually things like doctors, dentists, insurance etc.  The items we are buying don't fall into any of these type of categories as they are normal day to day supplies, like eggs or coffee.  However, it is true that the suppliers I am talking about are exempt from VAT as the supplier themselves does not need to register for VAT, which is why I wondered if this was the appropriate category.

 

0 - NO VAT - this is usually for items that are outside the scope of VAT e.g. paying wages, donations to charity etc.

 

I do understand (I think) the various categories, but just don't know which one this special group of suppliers who are not registered for VAT goes into.  If I buy say eggs (usually 0%) and icecream (usually 20%) from a supplier who is not registered for VAT, which VAT code should I choose on QB?

 

 

Established Community Backer ***

Re: Supplier not registered for VAT - which VAT code?

Typically, the Exempt - no VAT code is applied for businesses that are exempt. Since special rules apply to such businesses, it's best to check on HMRC's website to be 100% sure. Here is the link again: https://www.gov.uk/send-vat-return. 

Experienced Member

Re: Supplier not registered for VAT - which VAT code?

Thank you

Active Member

Re: Supplier not registered for VAT - which VAT code?

Hi 

I think the best way is to use the right code as if they were registered for the VAT and then change the VAT amount manually. For example, eggs are zero rated so they go to zero rated but ice cream VAT code would be S20% and change the VAT to 0 manually.