Forum Message

Accounting for Vat on non-EU purchases

Hi

I have purchased around £1000 software online from the USA, all downloads, so no import VAT has been paid.

I have tried entering as a non-EU purchase, but I am the asked to enter a VAT rate... should this be 0? As if I put 20% it then deducts this from the amount paid rather than adding it to it... or have I got this all wrong :-)

Many thanks

Oh, is there away to allocate job numbers to purchase/sales items?

anot


Posted by Anot Bot on Jun 30, 2012 9:14 PM BST

Hi Anot,

If your business is registered for VAT then the VAT rate you enter into Solar Accounts should match the amount shown on your receipt. In this case it is most likely 0%.

By default, Solar Accounts will apply the 'reverse charge' procedure when it calculates the VAT return figures. This procedure requires that 20% of the purchase be shown in Box 1 and Box 4 - these cancel each other out so there is not change to the Box 5 figure. See the section titled 'VAT on services received from overseas suppliers' on the following page for details:
http://www.hmrc.gov.uk/vat/managing/international/imports/importing.htm#3

If you don't think the reverse charge should apply, click the small 'Up' arrow next to the VAT Treatment field in the transaction window and select 'Customer does not pay VAT'.

Regards,


Posted by Mark McLaren (Solar Accounts) on Jul 1, 2012 8:41 AM BST

Hi Anot,

Sorry I forgot to answer your second question: To allocate to job number to sales/purchases, click the Options menu in the bottom-left of the transaction window, then select 'Associate with Job or Department.'

Regards,


Posted by Mark McLaren (Solar Accounts) on Jul 1, 2012 4:47 PM BST