Sage50 VAT on EU purchase

bought some stationary items online from Netherlands

UK Vat reg - no vat charge on goods/ invoice

First question  Goods  v  services ????

So how to enter into SAGE assuming its Goods:

Have T8 std related purchase from EU Supplier  + T20{reverse charge code]  codes set up  SO  WHAT TO USE ?

also setup are re EU are :  T23 std services + T24 zero services from EU suppliers respective;y

 

the vat return using T8 has boxes 2+4  and 7+9

but using T20 1+4  and 7   [assuming no other transactions in period shows box1 sales with the vat equiv - seems odd]

 

thoughts on correctness of posts please.  makes no difference to the p+l.  does make a difference on the face of the vat return though

 

tia

 

Comments
scalloway's picture

Reverse charge

scalloway | | Permalink

Reverse charge will apply so T8 would appear to be correct.

T8 vs T20

kiwilondon99 | | Permalink

thk  agree a reverse charge! its just how to code it  correctly through to the return

sage has Reverse charge @ T20 which then follows through to the VAT return has box 1 + 4

initially used T8 as you comment, with box 2+4  7+9 entries  

but now confused by SAGE50 !!

any clarity

tia

Witch-Queen's picture

Re: Sage50 VAT on EU purchase    1 thanks

Witch-Queen | | Permalink

This is copied from Sage help in V2010:

Tax codes for UK users

Provided your Windows Regional Settings are set to English (United Kingdom) the following tax codes are created:

  T0 zero rated transactions

  T1 standard rate

  T2 exempt transactions

  T4 sales of Goods to customers in EC*

  T5 lower rate

  T7 zero-rated purchases of Goods from suppliers in EC**

  T8 standard-rated purchases of Goods from suppliers in EC**

  T9 transactions not involving VAT***

  T20 sales and purchases of reverse charges

  T22 sales of Services to customers in EC*

  T23 zero-rated purchases of Services from suppliers in EC**

  T24 standard-rated purchases of Services from suppliers in EC**

* This tax code can be used for VAT-registered customers outside of the UK but within the EC. You must have the customer's VAT registration number entered on the customer record if you want to use the T4 or T22 tax code. If your customer is not VAT-registered, then you should use one of the standard UK VAT rates.

** These tax codes can be used for suppliers outside of the UK but within the EC. In accordance with VAT regulations, EC VAT rate codes used for purchases are given a notional rate that is linked to a UK VAT Rate. For example, Sage 50 Accounts' T8 or T23 rate for suppliers in the EC is linked to T1, which is the standard rate of VAT in the UK.

*** These transactions are not included on the VAT Return. Sage 50 Accounts also uses T9 as the default tax code for all the routines that are non-vatable, for example journal entries and error corrections. If you want to change the function of T9, you will need to set up another tax code that is non-vatable, for your software to use for these routines.

Important Note: The tax codes are set up by default, but it is your responsibility to ensure that these tax codes are used correctly.

So in your senario you have purchased stationary (and received physical Goods) from the Netherlands, which is a member of the EEC.  Therefore you would use T8 to code the invoice which will produce an entry of net (say) £100 VAT £0.00. The amount of the purchase will show in box 9 of the VAT return. (Had you purchased a service (eg web hosting) then you would use T23 and the same posting would result)

This is because you are VAT registered and have given the supplier your VAT reg number.

The rules are very simple: From the sellers point of view, if the buyer is in the EEC and gives you their VAT reg number for their country then you do not charge VAT on your invoice and the buyer declares the purchase on their VAT return in their country. If the buyer does not give their VAT reg number then the full amount of VAT is charged on the invoice.

Witch-Queen

Confused - help!!!!

Marleen | | Permalink

I am really an amateur here so forgive me if I'm coming across a bit thick here!
My bro in law is vat inspector for hmrc and I asked him about EC acquisitions.
He explained that to record an EC acquisition properly on the vat return you have to show 20% of the puchase net amount at box 2 & 4 on the return. This is known as acquisition tax and is a notional accounting transaction only.
I understand that it would be correct to code the EC acquisition to T8 but my query is does sage create the notional vat transaction from T8 or does the notional vat have to be input separately? And if notional vat has to be input manually how do I do this?
Am told that for example a purchase from EC with a value of 10000 the following transactions should be on Vat return:
Box 9 EC acquisitions 10000
Box 7 Purchases 10000
Box 2 Acquisitions Vat 2000
Box 4 Input tax 2000
As I said earlier I really don't have much of a clue how sage works on this or how EC acquisitions should b accounted for so I
would be really grateful if someone could explain in simple terms for me :)
Thanks!
Marleen

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