VAT Report UK - Box by Box

If you have the time, we recommend you visit the HMRC website to find out more about VAT reporting requirements for international trade as these can be quite complex and will depend on the nature of your business as well as the nature of your Customer/Supplier (are they individuals or VAT registered entities?). Our recommended approach is that you first determine your requirements and then review them against our table below to get clarity on how your transactions should be entered.

The table below explains how your UK VAT Report is compiled and which Box is updated for each combination of VAT Treatment and VAT Type.

  • VAT Treatment: This is specified when transactions are entered. Users should take particular care to select the correct option when entering Receive Money and Spend money transactions which are related to returns/refunds. For example if you are entering a General Receipt transaction to reflect a refund by a Supplier, then you should change the default from Goods or Services to UK Customer to Goods or Services from UK Supplier. If you don't make the change, the system interprets the VAT as a Sale/Income (Output VAT) and may report this incorrectly. The same concept holds true for returns/refunds you provide your own Customers via a General Payment transaction.
  • VAT Type: The VAT Code used in transactions has an underlying VAT Type. These can be reviewed by checking your organisation's Tax Rates settings.
  • Invalid: This indicates that the combination is not allowed during transaction entry.
  • ESL: Indicates whether the combination will be picked up by the EC Sales List.
  • Standard VAT: The Box filled on the VAT Return for UK organisation's using Standard VAT as set in VAT Status.
  • Flat Rate VAT: The Box filled on the VAT Return for UK organisation's using Flat Rate VAT as set in VAT Status.
  • Cash Basis Special Rule: This impacts UK organisation's which report VAT under the Cash Basis (when payment is made rather than invoices issued). For these combinations, Invoices and Credit Notes will appear on the VAT Return based on the Invoice or Credit Note transaction date regardless of whether they have been paid or not.

 

AccountsPortal is fully compliant with processing Reverse Charge and Acquistion Tax transactions. These are entered with the following combinations:

  • Reverse Charge
    • VAT Treatment = 23 - Services from EU Supplier and VAT Type = No VAT
    • VAT Treatment = 25 - Services from Supplier outside EU and VAT Type = No VAT
  • Acquisition Tax (like Reverse Charge but for purchase of Goods from EU)
    • VAT Treatment = 22 - Goods from EU Supplier and VAT Type = No VAT

 

ID VAT Treatment VAT Type Invalid ESL Standard VAT
Flat Rate VAT
Cash Basis Special Rule
               
SALES
1 Goods or Services to UK Customer Sales     1, 6 1, 6  
1 Goods or Services to UK Customer Exempt Sales     6 1, 6  
1 Goods or Services to UK Customer Zero-Rated Sales     6 1, 6  
1 Goods or Services to UK Customer No VAT     - -  
               
2 Goods to EU Customer Sales     1, 6 1, 6  
2 Goods to EU Customer Exempt Sales   X 6, 8 1, 6, 8 X
2 Goods to EU Customer Zero-Rated Sales   X 6, 8 1, 6, 8 X
2 Goods to EU Customer No VAT   X 6, 8 1, 6, 8 X
               
3 Services to EU Customer Sales     1, 6 1, 6  
3 Services to EU Customer Exempt Sales   X 6 -  
3 Services to EU Customer Zero-Rated Sales   X 6 -  
3 Services to EU Customer No VAT   X 6 -  
3 Services to EU Customer Sales - Digital Services to EU     6 -  
               
4 Goods to Customer outside EU Sales X   - -  
4 Goods to Customer outside EU Exempt Sales     6 1, 6  
4 Goods to Customer outside EU Zero-Rated Sales     6 1, 6  
4 Goods to Customer outside EU No VAT     6 1, 6  
               
5 Services to Customer outside EU Sales     1, 6 1, 6  
5 Services to Customer outside EU Exempt Sales     6 -  
5 Services to Customer outside EU Zero-Rated Sales     6 -  
5 Services to Customer outside EU No VAT     6 -  
               
99 No VAT / Out of Scope Sales X   - -  
99 No VAT / Out of Scope Exempt Sales X   - -  
99 No VAT / Out of Scope Zero-Rated Sales X   - -  
99 No VAT / Out of Scope No VAT     - -  
               
PURCHASES
21 Goods or Services from UK Supplier Purchases     4, 7 -  
21 Goods or Services from UK Supplier Exempt Purchases     7 -  
21 Goods or Services from UK Supplier Zero-Rated Purchases     7 -  
21 Goods or Services from UK Supplier No VAT     - -  
               
22 Goods from EU Supplier Purchases X   -    
22 Goods from EU Supplier Exempt Purchases     7, 9 7, 9 X
22 Goods from EU Supplier Zero-Rated Purchases     7, 9 7, 9 X
22 Goods from EU Supplier No VAT     2, 4, 7, 9 2, 7, 9 X
               
23 Services from EU Supplier Purchases X   - -  
23 Services from EU Supplier Exempt Purchases     7 -  
23 Services from EU Supplier Zero-Rated Purchases     7 -  
23 Services from EU Supplier No VAT     1, 4, 6, 7 1, 4  
               
24 Goods from Supplier outside EU Purchases     4, 7 -  
24 Goods from Supplier outside EU Exempt Purchases     7 -  
24 Goods from Supplier outside EU Zero-Rated Purchases     7 -  
24 Goods from Supplier outside EU No VAT     - -  
               
25 Services from Supplier outside EU Purchases X   - -  
25 Services from Supplier outside EU Exempt Purchases     7 -  
25 Services from Supplier outside EU Zero-Rated Purchases     7 -  
25 Services from Supplier outside EU No VAT     1, 4, 6, 7 1, 4  
               
99 No VAT / Out of Scope Purchases X   - -  
99 No VAT / Out of Scope Exempt Purchases X   - -  
99 No VAT / Out of Scope Zero-Rated Purchases X   - -  
99 No VAT / Out of Scope No VAT     - -  

 

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