Hi,
My company ,what is VAT registered ,sold scrap gold for amount 10 000 £ on April 2014 .
Gold scrap was bought from EC Member state on March 2014 and already included in previous VAT return (January, February, March).
As gold was immidiatley melted by buyer, than to this deal applied reverse charge VAT.
There was self billing invoice issued by the buyer 10 000 £ + 2000£ , but they pay 10 000 £, because output tax £2000 on this supply of gold to be accounted for to Customs and Excise by the buyer.
Thats fine and no problem with it.......
....But now I have to send VAT return for April, May, June and can't understand where to include this VAT........or may be I don't need to include it in VAT return........
Box 1 - VAT due in this period on sales and other outputs.......Seems not here
Box 2 - VAT due in this period on acquisitions from other EC........No
Box 4 - VAT reclaimed in this period on purchases and other inputs....... Not here
Box 5
Box 6 - Total value of sales and all other inputs excluding any VAT........... 10 000£ here ???
Box 7 - Total value of purchases and all other inputs excluding any VAT .........no purchases
Box 8 - Total value of all supplies to other EC memeber states ....... nothing.......zero
Box 9 - Total value of all acquisitions from EC Member States .......zero
Please help me with advise - in wich box I have to include this reverse VAT, or I don't have to include it at all ????
Thanks.
Replies (5)
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Clarify the facts, please
Gold scrap was bought from EC Member state on March 2014 and already included in previous VAT return (January, February, March).
Presumably, you included the acquisition tax at 20% of the cost in Box 2 and claimed it as input VAT in Box 4, so no net VAT payable as a result of this transaction in your March quarter VAT return. You would also have included the purchase in Box 7 and Box 9.
My company ,what is VAT registered ,sold scrap gold for amount 10 000 £ on April 2014 .
As gold was immidiatley melted by buyer, than to this deal applied reverse charge VAT.
There was self billing invoice issued by the buyer 10 000 £ + 2000£ , but they pay 10 000 £, because output tax £2000 on this supply of gold to be accounted for to Customs and Excise by the buyer.
Why does reverse charge apply because the customer melted the gold immediately? If the customer has raised a self-billing invoice for £12,000, why have they paid only £10,000?
Was the customer in the UK? If so, your supply is not zero-rated and the reverse charge does not apply. You should include the £2,000 VAT in Box 1 and the £10,000 in Box 6 of your June VAT return and claim the outstanding £2,000 from your customer. If he is not in the UK (but in that case, why would you bring the gold scrap into the UK?), but in another EU state, the supply of goods is zero-rated and subject to the reverse charge in the customer's EU member state. You would include £10,000 in Box 6 and Box 8. I would be surprised if the rate of VAT in the customer's EU state was the same as ours - 20%.
Clarify the facts, please
Nex wrote:
Gold scrap was bought from EC Member state on March 2014 and already included in previous VAT return (January, February, March).
Presumably, you included the acquisition tax at 20% of the cost in Box 2 and claimed it as input VAT in Box 4, so no net VAT payable as a result of this transaction in your March quarter VAT return. You would also have included the purchase in Box 7 and Box 9.
Nex wrote:
My company ,what is VAT registered ,sold scrap gold for amount 10 000 £ on April 2014 .
As gold was immidiatley melted by buyer, than to this deal applied reverse charge VAT.
There was self billing invoice issued by the buyer 10 000 £ + 2000£ , but they pay 10 000 £, because output tax £2000 on this supply of gold to be accounted for to Customs and Excise by the buyer.Why does reverse charge apply because the customer melted the gold immediately? If the customer has raised a self-billing invoice for £12,000, why have they paid only £10,000?
Was the customer in the UK? If so, your supply is not zero-rated and the reverse charge does not apply. You should include the £2,000 VAT in Box 1 and the £10,000 in Box 6 of your June VAT return and claim the outstanding £2,000 from your customer. If he is not in the UK (but in that case, why would you bring the gold scrap into the UK?), but in another EU state, the supply of goods is zero-rated and subject to the reverse charge in the customer's EU member state. You would include £10,000 in Box 6 and Box 8. I would be surprised if the rate of VAT in the customer's EU state was the same as ours - 20%.
Special Accounting Scheme for Gold
OK. This is nothing to do with normal reverse charge VAT accounting, but is a compulsory scheme for dealing with VAT on gold transactions, under which the customer accounts for the VAT in much the same way as a reverse charge. See section 11 of VAT Notice 701/21.
As it says in the section 12, if you have sold gold under the scheme, you only enter the net value (£10,000) in Box 6. The £2,000 VAT which will be paid by the customer is nothing to do with you, so ignore it.