I am somewhat confused on how to record foreign transactions. I have receipts for fuel which has been purchased by debit card in Belgium and Czech Republic and includes VAT. I know I have to claim the EU VAT back separately and not on my UK VAT return and have looked at your example for recording this. However I am unsure what I should set the VAT treatment to. Could you advise please.
Also £500 worth of foreign currency has been purchased for small purchases on foreign trips. I have set up an account for the foreign currency and have recorded the purchase as a general transaction from the bank account to foreign currency account. I have then marked payment for small foreign cash payments (which also include VAT) as coming out of the foreign currency account. I have calculated the exchange at the rate which I purchased the cash. Is this the correct way of doing it or should I do it another way.
Many thanks
Sarah
Hi Sarah,
When you are charged non-UK VAT then the transaction is outside the scope of UK VAT. Set the VAT Treatment to 'Out of Scope' and add an extra line to account for the EU VAT as described here:
http://www.solaraccounts.co.uk/help/how-to-reclaim-eu-vat.php
Your approach to the foreign currency is correct.
Regards,
