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EC goods on a cash basis VAT return

Software not producing VAT figures in box 8 for goods sold but not yet paid for

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At paragraph 16.4, VAT Notice 726 instructs reporting for EC sale of goods as follows:

"I account for VAT using the cash accounting scheme how should I complete box 8 of the VAT Return?

The value you enter in box 8, should be the total of all intra-EC supplies of goods made in that reporting period (excluding VAT) and not the value of payments received in that period. The total value of entries on your ESL should agree with the value entered in box 8 of your VAT Return (see Notice 731 Cash Accounting)."

The client software (QBO) is set to cash based VAT reporting, the sale flagged as ECG and the customer's VAT number verified, but the software will not populate box 8 for unpaid invoices (don't know if it will populate at all in future, as none of client's new overseas sales have yet been paid.)

Any tips for this or other software to produce a correct VAT return?

Replies (2)

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Teignmouth
By Paul Scholes
25th May 2017 12:33

I'm not surprised VAT has never been QB's strong point (UK software is far more reliable!).

Tell QB their software is non compliant and ask them to fix it.

One workaround is to pay the invoice off from a dummy bank account called something like "Trade debtors holding account" or "QB get your finger out" then when the actual payment is made treat it as a transfer from this account. This shouldn't mess up the VAT return too much as, hopefully, there's no VAT, but will make a mess of credit control if there's lots of them.

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By JimH
25th May 2017 14:00

Thanks, Paul. They have been told and remain totally silent. We made manual amendments and filed last quarter from agent portal but it's when VAT MTD bites that we will certainly need to test such work arounds as you suggest.

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