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MTD - one invoice mixed rates of VAT ...

Purchases from supermarkets and suppliers on VT

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Good evening all and hope you are well. I am pretty sure the answer to my question is YES! But I am unsure to why this hasn't caused more uproar! We use VT and do bookkeeping/VAT returns for many cafes, restaurants etc. We often receive receipts (a lot of receipts) from the likes of Bookers, Tesco, B&M etc - on VT we usually enter invoice amount, VAT on invoice and then analyse the net. However, going forward are we going to have to split the receipt into two seperate VT transactions to account for the standard rated items (alcohol, cleaning, stationery etc) and the zero rated? I know it only takes a calculator, but its a calculator and alot of time to do this. Apologies if this is a simple question answered elsewhere. I know the rules have relaxed for supplier statements when the VAT is all at the same rate....Thank you all in advance

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By jcace
15th May 2019 21:28

Per VAT Notice 700/22:
For each supply you receive you must record the:
time of supply (tax point)
value of the supply
amount of input tax that you will claim

There is no requirement under the regulations to record inputs for the period split by VAT rate.

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15th May 2019 23:05

Phew! Thank you for confirming this, panic over, and probably over thinking requirements.

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to janddaccountants
16th May 2019 05:09

You aren't overthinking. Fairly sure (from memory) that in the original proposals that HMRC wanted to bring in this would have been a requirement.
Note however that The Value Added Tax (Amendment) Regulations 2018 do require this for sales.

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to Wanderer
16th May 2019 09:11

I think you are right about this. In fact I was under the impression that the most recent changes still required the various vat rates to be separated out. A single entry for the input tax (net and tax) is nice and easy. It will, after all, track back to the original statement from the supplier as long as the supplier separates out net and vat on the statement. (more possibly an invoice summary than a statement)

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to johnhemming
16th May 2019 09:44

Agreed, my reading of the notice is that you have to have the information available if you use the new 'concession' for statements.

notice 700/22 wrote:
The following rule has the force of law:
Where a supplier issues a statement for a period you may record the totals from the supplier statement (rather than the individual invoices) provided all supplies on the statement are to be included on the same return and the total VAT charged at each rate is shown.

Not that dissimilar if you refer back to the legislation for individual purchase invoices which clearly says you don't need to record it:-
The Value Added Tax (Amendment) Regulations 2018 wrote:

(b) subject to sub-paragraph (c), for each supply received within the period—
(i) the time of supply,
(ii) the value of the supply, and
(iii) the total amount of input tax for which credit is allowable under section 26 of the Act(a);
(c) where more than one supply is recorded on a tax invoice and those supplies are either—
(i) supplies made which are required to be accounted for in respect of the same prescribed accounting period and are subject to the same rate of VAT, or
(ii) supplies received for which credit is allowable in the same prescribed accounting period,
they may be treated as a single supply for the purposes of either sub-paragraph (a)or (b), whichever is relevant;
(as long as c(ii) applies) and 4.3.3 of the latest notice confirms this:-
notice 700/22 wrote:
There is no requirement under the regulations to record inputs for the period split by VAT rate.
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to johnhemming
16th May 2019 09:52

Agreed, my reading of the notice is that you have to have the information available if you use the new 'concession' for statements.

notice 700/22 wrote:
The following rule has the force of law:
Where a supplier issues a statement for a period you may record the totals from the supplier statement (rather than the individual invoices) provided all supplies on the statement are to be included on the same return and the total VAT charged at each rate is shown.

Not that dissimilar if you refer back to the legislation for individual purchase invoices which clearly says you don't need to record it:-

The Value Added Tax (Amendment) Regulations 2018 wrote:

(b) subject to sub-paragraph (c), for each supply received within the period—
(i) the time of supply,
(ii) the value of the supply, and
(iii) the total amount of input tax for which credit is allowable under section 26 of the Act(a);
(c) where more than one supply is recorded on a tax invoice and those supplies are either—
(i) supplies made which are required to be accounted for in respect of the same prescribed accounting period and are subject to the same rate of VAT, or
(ii) supplies received for which credit is allowable in the same prescribed accounting period,
they may be treated as a single supply for the purposes of either sub-paragraph (a)or (b), whichever is relevant;
(as long as c(ii) applies) and 4.3.3 of the latest notice confirms this:-
notice 700/22 wrote:
There is no requirement under the regulations to record inputs for the period split by VAT rate.
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to Wanderer
16th May 2019 11:33

It is, I suppose, a matter of either kicking suppliers to produce statements that summarise invoices with totals at each vat rate or making sure that the invoices that substantiate the statement are kept somewhere.

Thank you for the research, however.

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to johnhemming
20th May 2019 16:10

Sorry to be slow, are we saying that a sales invoice MUST be split by different VAT rates? We have a design and build company that often does projects where the works qualify for zero rate in part. Historically, a rate of VAT is calculated based on the SR/ZR mix. From now on, should the invoice be split between SR and ZR sales?

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