How to account for VAT from EU and non EU purchase orders

VAT on EU and non EU purchases

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Help, I am trying to get to grips with how to account for VAT on foreign purchases. Most of my Client’s purchase orders for non UK purchases show TAX as ‘£0.00’. Does this mean that for an EU or non EU purchase I am supposed to add 20% on top, or account for it as though it’s already included? Ie. The subtotal is £100 – so, should VAT be £16.67 (83.33+16.67) or £20 (100+20)? My Client sells housewares.

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Scalloway Castle
By scalloway
28th Sep 2016 09:47

On non UK purchases from EU suppliers where the supplier has zero rated the goods you need to calculate the VAT as normal on top of the purchase price. Your software should have an option to do this.

On non EU purchases you don't calculate VAT on the initial purchase invoice. HMRC charge VAT on imports separately.

You should get paperwork from HMRC regarding the VAT. The most important part of this is the C79 form which is the document that allows you to reclaim the VAT paid.

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