Independent VAT Consultant
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Getting the VAT return right: Boxing clever

18th Sep 2017
Independent VAT Consultant
Columnist
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Now that much of HMRC’s checking is carried out by computers, Neil Warren explains how advisers can reduce the risk of visits and enquiries by ensuring VAT returns are completed correctly.

Sales - outputs

There are two boxes on the VAT return that relate to the sale of goods: box 6 and box 8. The box 6 entry relates to worldwide sales made by the business for both goods and services, but box 8 is only relevant if a business sells goods that are sent to other EU countries.

Here are two common errors with these boxes:

Some clients think that if a sale is recorded in box 8, then it is left out of box 6. This is incorrect. Box 6 includes the kitchen sink, so to speak – see next section.

Box 8 is only relevant to the sale of goods to EU customers where the goods leave the UK. It is always left blank in relation to the sale of services. I have seen some concerned taxpayers over the years who have made entries in Box 8 for services and then been very confused when HMRC has sent them Intrastat returns for completion!

Example 1

Aunty Betty lives in Dublin and has ordered a computer from ABC Computers in the UK for her nephew’s birthday, who lives in Manchester. Even though an invoice is being raised to a customer based in another EU country, the sale is excluded from box 8 on ABC Computers’ VAT return because the supply of goods is only within the UK. It will be recorded in box 6 in the usual way.

Box 6 – inclusions and exclusions

I think box 6 is very important and it is worthwhile to check that it is consistent (as far as possible) with the turnover shown on annual accounts. So here are a few exclusions and inclusions:

Inclusions

The basic guidance is stated in HMRC Notice 700/12, section 3.7 re Box 6 :“Show the total value of hiletax-s

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