I am openly admitting that I have confused myself and thus a voice of reason and clarity would be most appreciated. That aside, where I still have a degree of confusion / uncertainty (stick with me here Ian) is OK so if the EU supplier/purchase invoice doesn’t include/show VAT, when I input into QF as a purchase and tick ’ Postponed accounting rules for imported goods’, should I keep the VAT rate at 20% or 0%, with the observation being that if set at 0% obviously box 1 on the return doesn’t then contain the VAT element of that purchase. (we only input 4 to 5 EU consignment a year, they are low value and I tend to pay the invoice 7 days after receiving the goods). I have previously played around with entering them into QF as a Euro invoice. Just for reference my supplier invoices are in Euro’s however I input them into QF as sterling based on the exact exchange rate at the point in which I pay the invoice. The 'reverse charge' is literally just the amount of VAT you would have paid on that service if you had bought it in the UK. So based on your advice I have just been playing around with an un-paid EU supplier Invoices to see what implications various settings have on the VAT return. The reason the Google invoice is £0 is that G Suites VAT is reverse charged which just means you add it to both the output VAT you need to pay HMRC as well as the input VAT you need to claim back which is net £0. Say you were on flat rate VAT - if you didn’t do the reverse charge then your £100 purchase would “cost you” £120 from a UK supplier but only £100 if the supplier is overseas. The point of all this “pay and claim back” dance is as FarayKeynes hints, to level the playing field between UK and non-UK suppliers - it makes a difference if you’re in a situation where you can’t reclaim all your input VAT. The reverse charge does the same thing for services (where there’s no physical “border crossing” involved). Postponed VAT accounting means that rather than paying the £20 up front to HMRC at the border you instead “pay” it by adding an extra £20 to box 1 on your next VAT return. Ignoring customs duty for a moment, if you bought the same goods worth the same amount from an overseas supplier then you would pay £100 to the overseas supplier and £20 in VAT to HMRC, and then claim the £20 back on your VAT return. If you’re buying goods worth £100 ex VAT then if you were buying from a UK supplier you’d pay £120 to the supplier and then later claim £20 back from HMRC on your next VAT return (unless you’re on flat rate or partially exempt etc.). but instead you declare the VAT you would have paid at UK rates if you had bought the same goods or services from a UK VAT-registered supplier VAT registered invoicing for your limited company even faster with Crunch Free.Guidance on VAT Invoices and Sales Receipts. supplier does not charge you VAT at their local rate Google Play Store VAT App DownloadNEW Instructions for Filing Your.The idea of the reverse charge mechanism and the postponed VAT accounting rules (and within the EU, the rules for dispatches and acquisitions) essentially boil down to I know it seems obvious however, what throws me is that our EU supplier/purchase invoices are all zero rated vat and therefore it sort of seems counter intuitive to then calculate VAT.
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