Hi Mark.. I have just run a VAT return and in Box 1 I am seeing "Money Paid Out" items and so a negative VAT value. have looked everywhere including VAT treatment but cannot find out why this is happening. Also it is an issue that the VAT inspector is querying so I really don't want it sticking out like a sore thumb.
Thanks Sarah
Hi Sarah,
What is the VAT Treatment for the payment? If it is a purchase of Services from a supplier outside the UK then Solar Accounts is probably applying the 'reverse charge' rule, which requires that the VAT amount appear in BOTH Box 1 and Box 4. These figures cancel out and the transaction has no affect on your Box 5 figure. See this page for details:
http://www.hmrc.gov.uk/vat/managing/international/imports/importing.htm#3
Regards,
