Accounting for VAT on an EU Acquisition

Accounting for VAT on an EU Acquisition

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I am a bookkeeper for a company that has made an acquisition of electronic goods from a supplier in an EU country and have provided that supplier with their UK VAT Reg No. therefore the purchase invoice does not have any VAT charged on it.

I believe that I have accounted for the VAT correctly on the VAT Return (Net Value of the goods was put in Box 7 & 9 and the Notional VAT at 20% was put in Box 2 & 4, this was done automatically by Xero when using the EC Purchases @ 20% tax code). 

However, I should probably have just manually adjusted the VAT Return rather than enter the invoice on Xero as if it had VAT charged on it. I am now left with a balance owing on the Creditor's A/c equating to the VAT amount.

I would be very grateful if someone could advise me how to remove this Notional VAT element that is left on the Creditor's A/c? The invoice has been paid in full at the Net Value.

Many thanks in advance for any help offered.

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AshTag86
By Ash_D86
25th Jul 2014 06:22

EC Purchases @ 20%

@NikkyJJ - from what you've described above, it sounds like you may have used an old 'EC Purchases @ 20%' tax rate for this transaction.

On 23rd of June we release 3 new tax rates for these type of transactions, this means that Xero now automatically accounts for this on the VAT Return automatically, within the relevant boxes.

In order to change this transaction, you could:

Find and click into the transaction.Selection Invoice Options, Edit.*Change the tax rate to EC Acquisitions (20%).Update

*In order to edit the tax rate, there will need to be no payments applied.

For more information about the latest release, please take a look at one of my earlier posts about this.

If you would like any further information on this, please pop an email to [email protected].

Thanks

Ashley Driver
Education Specialist, Xero
@ashtag_86

 

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