Is there a QuickBooks VAT code to populate Box 2 of the VAT100?

Is there a QuickBooks VAT code to populate Box...

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Is there a QuickBooks VAT code to populate Box 2 of the VAT100? And is Box 2 for goods bought from the EU where the VAT is not paid to the purchaser?

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By Coeus
24th Jan 2012 13:36

As requested...

Box 2 is used for acquisitions from the EU.

 

Acquisitions from the EU are treated as a 'self-supply' by the purchasing UK business.

 

Provided the UK business is VAT registered, the EU business should zero-rate their dispatch (your acquisition).

 

If the goods purchased would have been standard rate vatable if sold in the UK then VAT @ 20.0% is 'paid' in box 2 and 'repaid' in box 4 - nil VAT is due as a result.

 

Assuming your QuickBooks is set up correctly and the goods were vatable in the UK at the standard rate of VAT is applicable, the 'EGS' VAT code should be used. This will:

 - Post the O/P VAT in box 2

 - Post the I/P VAT in box 4

 - Post the net I/P in box 7

 - Post the net I/P in box 9

 

Conversley if the goods were zero rate vatable in the UK you would use the 'EGZ' code posting VAT @ 0.0% in boxes 2 and 4.

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By chatman
24th Jan 2012 13:46

Thanks Coeus. Very helpful and well explained.

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By chatman
24th Jan 2012 13:57

EGS Problem

Just tried that Coeus (by writing a cheque for £100 with VAT code EGS), and it puts the VAT in  Boxes 1 and 2, instead of 2 and 4. Does that mean my EGS code is set up incorrectly? If so, do you know what I would need to do to correct it?

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By Coeus
24th Jan 2012 23:11

Hi chatman - sorry for the late reply I only just checked the thread again.

 

The VAT code used in your QuickBooks appears to be set up incorrectly. I suggest renaming this (lists > VAT codes > Edit) as a different code (say '1') and making it inactive to avoid future use.

 

As such you will need to set up a new EGS VAT code. I have copied a link below on how to set it up manually (applies in all recent versions of QuickBooks). 2010 and later versions have a VAT code set up 'wizard' but I have always done it manually, that way I know whats going on behind the scenes.

 

http://support.intuit.co.uk/quickbooks/en-gb/iq/VAT/Create-new-VAT-code-...

 

Under the 'Create new VAT items' section (about 1/3 down the web page) you need to create, or ensure that the existing items match, the VAT items for the following as laid out in the table (i.e. VAT rate % and VAT return box) for:

1. Standard Purchases 20.0% (boxes 4 and 7)

2. EC Purch Goods Standard 20.0% (boxes 2 and 9)

 

Once you have created these VAT items, you need to create the VAT group that ties these two VAT items together. This is shown immediately below the above section titled 'Create new VAT groups' and you need to do this as laid out in the table for 'EC Purch Goods Group 20.0%'.

 

The final step is to create your new 'EGS' VAT code. This is shown immediately below the above section titled 'Created new VAT codes' and you need to do this as laid out in the table for 'EG4'.

 

(NOTE: QuickBooks guides never renames old VAT codes, hence the 'EG4' VAT code in the final step rather than 'EGS'. Clients can find this confusing so I prefer to rename the old VAT code (last required to do so when VAT was at 17.5%) to a number and make it inactive. This allows the new VAT code to replace the old without any hassle to the clients use of VAT codes.

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By chatman
24th Jan 2012 23:15

Thanks Coeus. That's great; really helpful.

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