This has been covered before I think, though on a few threads, the outcomes appear different. We have an invoice from a software supplier based in RoI. Their invoice has NIL VAT on, and states "reverse charge".
To recognise the expenditure I need to DR Expense / CR Bank, say £500. So far so easy.
However, I understand the need to notionally account for VAT on the purchase with a DR to VAT control, so a DR of £100 in this example.
QUESTION 1 - is the other side of this journal also to VAT control, CR £100?
QUESTION 2 - how do I account for the fact that VAT on sales will now be £100, with NIL sales - do I notionally adjust the face of the VAT return to "account" for this (non) sale, ensuring Output VAT / Sales = 20%...?
Any advice greatly received.
Thanks - D