I purchase a lot of goods from Germany and my vendors add the normal German VAT of 19% on the invoices. I pay for these as a cash because payment is made in advance of receiving the goods. When I process this as a Money Out transaction the software tells me to put the transaction as "Out of VAT" or with 0% tax. How can I include these EU purchases into my VAT return.
Hello Priyanka,
You cannot reclaim German VAT on your UK VAT return. Instead, add the VAT amount as a separate line item on the transaction as described here:
http://www.solaraccounts.co.uk/help/how-to-reclaim-eu-vat.php
Regards,