Dear Userinfo40,
I now post all UK invoices as 0% VAT and there is no mechanism to recoup VAT on any UK invoice.
UK suppliers may charge whatever VAT they want and we have no need to record it as we can't claim it back. So record it as inclusive of VAT at 0%.
The purchase transaction from the UK is β¬10 with 0%VAT added. To record this correctly, β¬2.30 (23%VAT of β¬10) needs to be added to both the T1 and the T2 line of the VAT3 return. This provides proper reporting to Revenue but has no cash effect.
So there is no VAT recorded on purchases for your T2 as you can't claim it back and no impact on T1 as its Sales only.
Now recorded French VAT at a different rate of 21% to our rate of 23% requires a French VAT to be created linked to your T2.
Hopefully, this is right.
Regards
John
