VAT return box 2 - VAT on (EU) acquisitions

Hi all!

 

Wondering if you can help set the record straight on a EU acquisition VAT query I have.

 

Example: Business 'A' is UK VAT registered (and UK resident) and makes acquisitions from a VAT registered EU business 'B'. The goods would be standard rated (20.0%) in the UK, however as acquisition and meeting criteria is zero rated (0.0%) by business 'B' in accordance with EU directive.

 

In the above example, I believe you would:

1. Include the net value of the acquisition (zero-rated by 'B') in box 7 of the VAT return (inputs) = £100

2. Include the net value of the acquisition (zero-rated by 'B') in box 9 of the VAT return (acquisitions from EU countries) = £100

3. Include the VAT payable on the acquisitions based on the goods itself in box 2 (VAT due - but not yet paid by you - on goods that you buy from other EU countries) = £20 (as a standard rated good in the UK)

4. Include the VAT reclaimable on the acquisitions included in box 2 in box 4 of your VAT return (VAT reclaimable on inputs) = £20

 

Is the above treatment correct? If for arguements sake the acquisitions would have been zero-rated in the UK, would steps (3) and (4) be £0?

 

Can someone also explain exactly what is meant by "VAT due - but not yet paid by you - on goods that you buy from other EU countries". I'm confused by this as the VAT 'due' in netted to nil via box 2 and box 4 and 'but no yet paid by you' - if zero rated from 'B' there is nil VAT to pay (or VAT at 0.0%) - the statement makes little sense to me!

 

Thanks in advance for any advice!

 

Coeus.

Comments
There are 5 comments. Login or register to view them.

What don't you understand?

Euan MacLennan |
Euan MacLennan's picture

Thanks for your reply

Coeus |

More answers

Euan MacLennan |
Euan MacLennan's picture

Correct

A.Sharp |

 VAT registered client bought

Yvonnel_b |