VAT Report UK - Box by Box

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 Acquisition Tax transactions. These are entered with the following combinations:

• Reverse Charge
• VAT Treatment = 22 - Goods from EU Supplier and VAT Type = Standard Rate Reverse Charge
• VAT Treatment = 23 - Services from EU Supplier and VAT Type = No VAT
• VAT Treatment = 24 - Goods from Supplier outside EU and VAT Type = Standard Rate Reverse Charge
• 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

• Domestic Reverse Charge (for Construction Industry)
  
• VAT Treatment = 1 - Goods or Services to UK Customer and VAT Type = 20% Income (Domestic Reverse Charge) or VAT Type = 5% Income (Domestic Reverse Charge)
• VAT Treatment = 21 - Goods or Services from UK Supplier and VAT Type = 20% Expense (Domestic Reverse Charge) or VAT Type = 5% Expense (Domestic Reverse Charge)

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			-	-
1	Goods or Services to UK Customer	20% Income (Domestic Reverse Charge)			6	6	X
1	Goods or Services to UK Customer	5% Income (Domestic Reverse Charge)			6	6	X
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
2	Goods to EU Customer	Zero Rated Income (UK to EU) **Not for use in NI**		X	6	1, 6	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			-	-
21	Goods or Services from UK Supplier	20% Expense (Domestic Reverse Charge)			1, 4, 7	1, 4, 7	X
21	Goods or Services from UK Supplier	5% Expense (Domestic Reverse Charge)			1, 4, 7	1, 4, 7	X
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
22	Goods from EU Supplier	Postponed VAT Accounting			1, 4, 7	1, 7	X
22	Goods from EU Supplier	Standard Rate Reverse Charge			1, 4, 6, 7	1, 4	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			-	-
24	Goods from EU Supplier	Postponed VAT Accounting			1, 4, 7	1, 7	x
24	Goods from EU Supplier	Standard Rate Reverse Charge			1, 4, 6, 7	1, 4	x
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			-	-