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VAT Reverse Charge - Linked In Invoice

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Just a bit of clarification:

On invoices from Linked In IRE to a UK VAT registered business it mentions they may need to account for the VAT reverse charge procedure. If the invoice is £100 plus VAT it would be shown on the UK VAT return as Box 2 £20, Box 4 £20, Box 5 £0, Box 7 £100, Box 9 £100.

This would mean a VAT neutral postion and a P&L cost on £120. 

However am i right in thinking if the UK business supplys them with the VAT number then the invoice amount should only be £100. This would mean the same as above in terms of the VAT return but the business actually pays £100.

 

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chips_at_mattersey
By Les Howard
28th May 2020 11:53

Correct - you provide your VAT number. LinkedIn charge you the net amount only.
Your accounting entries are: Box 2 £20, Box 4 £20, Box 5 £0, Box 6 £100, Box 7 £100 - not Box 9, as the supply is of services, not goods.
For you the result is net zero. But for partially exempt businesses there is a net VAT difference.

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By Degan89
28th May 2020 12:18

Thanks for the response. On my Sage the amount of £100 is shown in Box 9 and not Box 7 however.

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By Degan89
28th May 2020 12:35

Ignore the above, it's shown in both box 7 & 9

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By kiwilondon99
28th May 2020 13:36

what sage, vat code, do you apply when processing your sag e PL invoice ?

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By Degan89
28th May 2020 14:52

Sage Business Cloud Accounting
Supplier is registered for VAT in the EU. "VAT is set to zero"

I tried the following two methods of entering the invoice.

Example one - Inv £100 - VAT 20% - "Services (standalone)" selected from drop down- VAT Return shows - Box 1 £20, Box 4 £20, Box 6 £100, Box 7 £100

Example two - Inv £100 - VAT 20% - "Goods (and related services)" selected from drop down -VAT Return shows - Box 2 £20, Box 4 £20, Box 7 £100, Box 9 £100

I bit long considering a neutral position and will be asking sage as well, but would like to know the correct boxes. From a reliable source above it should be box 2,4,6 & 7 with the amounts in.

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