Sage Instant - RCT for Subcontractor

lisabyte · 26-05-2009 12:40pm #1

Using Sage Instant Accounts 2009 - Have issued Invoice to Principal Contractor (Reverse Charge VAT) and have received payment of 65% - Balance of 35% to be claimed back from Revenue. Just wondering how to process? Want to clear the debtor account for the principal contractor - been told to issue credit on this account - should this be against a new nominal code created for RCT refunds from Revenue? Any help appreciated! Thanks.

crazzzzy · 26-05-2009 1:23pm

I would put in a journal entry to clear the debtor and put it in RCT receivable as you suggested. Or if you asked for it to be offset against a different tax put it in there.

Mr Clonfadda · 27-05-2009 5:15pm

What i normally suggest for RCT payments is to setup a bank account called RCT Account and i would then post customer receipt of the 35% on this Account.

What this does is clear the customer account and leaves a bank account with a value you on it that can "pay" any tax you set the credit off against.

Feel free to PM if you need further advice.

hookedcruiser · 28-06-2012 8:52am

In reply to your question have a look at this link: It explains quite simply what the input process would be for both the Principal Contractor and the Sub-Contractor within Sage. This process would also apply to any other software programme.

http://sage.ie/support/vat-legislation/relevant-contracts-tax-rct.aspx

KevinMcDonald · 04-07-2012 2:17pm

hookercruiser is correct.

Here is the article on how to do it in Instant/Sage50 Accounts: http://www.sage.ie/downloads/support/pdf/How_to_process_RCT_manually_in_Sage_50.pdf

Kevin McDonald
Buiness Advice Consultant
Sage Ireland

nedireland · 07-02-2013 11:18pm

Hi guys - anyone know how to do the reverse charge VAT in Sage? I cant find anything on how to do it

help!!!

hookedcruiser · 08-02-2013 8:59am

In the later versions of Sage there is a facility to do this, however, for those of us who choose to save money and continue with the older software this is the way I was told to do Reverse Charge VAT.

As this procedure is only a paper exercise for return purposes if you se tup one of the VAT nominals (T10 possibly) at 13.5% (if that is the VAT rate for Reverse charge in your country) it is in Ireland.

Then whenever you input an invoice from the Sub-Contractor where the reverse charge comes into effect select T10 as your tax code.

Then when it comes to your VAT return just print it all off before reconciling it and then add the T10 figure to the T1 total and then Subtract it from the T2 total.

This in no way affects the actual amount of VAT you are paying Revenue because you as the Principal contractor would be VAT registered yourself and are therefore reclaiming it.

Hope this helps!!!

hookedcruiser · 08-02-2013 9:20am

Sorry too early in the morning. Please disregard the last message:

Set up a new VAT code to represent VAT at 13.5%
Make the rate 0 but type the description as 13.5% reverse charge VAT

Assuming an invoice arrives for €100.00 from the Sub-Contractor,
enter the invoice as normal using the batch supplier invoice screen.
Use the new VAT code for reverse charge VAT that you have set up.
This will post an invoice for €100.00 against the Sub-Contractor at zero rate.

Now go to nominal Ledger and click on journals.

Enter the following journal to reflect the reverse charge at 13.5% on €100.00
The reverse charge VAT is €13.5%
2200 Sales tax control account Credit 13.50
2201 Purchase tax control account debit 13.50

The trial balance will now read as such:

N/C Name DR CR

2100 Creditors Control A/C 100.00
2200 Sales Tax Control A/C 13.50
2201 Purchase Tax Control A/C 13.50
5000 Materials Purchased 100.00

Hope this helps? You might like to look at the following link which has helped me considerably over the years and is where I got the same answer that I have given you http://forum.makingithappen.co.uk

Herbalist · 08-02-2013 11:19am

You can do reverse charge VAT in Instant Accounts v2008 and above. This is something that you set up and the program has some reports that are specific to reverse VAT that you can run.

You need to check the reverse VAT T20 code, record the sale of services to a principal contractor and record the purchase of services from a sub contractor. You can then generate the VAT return for reverse charge transactions and run your reverse charge reports (one shows sales invoices and sales credits for reverse charges and one shows purchase invoices and purchase credits for reverse charges.

There is a compulsory line of text that has to be on the invoice if you are a sub-contractor - the wording is

“VAT on this invoice is to be paid by the principal contractor”

If you have a support contract with Sage you can ring the support team who can assist you in setting this up.

newtothis2011 · 04-10-2014 8:27pm

I just installed sage yesterday and was having a look on the demo practice, when i picked T20 as a VAT code when making an invoice out for a principal contractor the message that come up on the invoice referred to UK so was wondering if the same message comes up on the actual invoice and perhaps its just the UK message in the practice sage?

Mr Clonfadda · 06-10-2014 9:19am

Sage Demo data is generally UK Demo data. you may be able to get Irish demo data from them.

Sage Instant - RCT for Subcontractor

Comments