0% VAT on Items for Resale (From UK)

JohnCleary

Hi all,
Becoming VAT registered in Jan.

90% of my Income will be from consultancy / service - 13.5% (Labour)

Very rarely, I need to purchase items for re-sale to the client. This is almost always from the UK. So, being VAT registered, I am charged 0% VAT on the purchase of the item from the UK.

When I re-sell to the client, I charge 23% VAT

Question is, and this may sound completely stupid and obvious... when putting down my Expense transaction of the purchase of the item, I just put it under the "0" category for VAT, right? (I'm using Wave, and have configured 3 Tax amount: 0 / 13.5 / 23)

Cheers.

Halloween Jack

What type of consultancy is it? I ask because that professional services are typically supplied at standard rate (23%)

You have drifted into intracommunity VAT accounting:

https://www.revenue.ie/en/vat/goods-and-services-to-and-from-abroad/acquisitions-from-other-eu-member-states/index.aspx

relax carry on

Consultancy services are standard rated.

https://www.revenue.ie/en/vat/vat-rates/search-vat-rates/C/consultancy-services.aspx

JohnCleary

Sorry, IT consultancy / support... assumed that was 13.5% as all I could find on Revenue Database was "Computer Repair"

Would it be:
23% for consultancy
13.5% for general support "come fix the PC "

-Edit- Putting my own thread off topic.

JohnCleary

[Deleted User] wrote: »

You have drifted into intracommunity VAT accounting:

https://www.revenue.ie/en/vat/goods-and-services-to-and-from-abroad/acquisitions-from-other-eu-member-states/index.aspx

Thanks, I read that earlier but only now saw the table.

Makes sense....
Charge myself VAT
Then charge end end user VAT

It all balances out

The purchases you paid no vat on go in the zero rate column for intra EU. The sales you charge vat on locally go in the vat rate column for goods sold within the state. So, you pay no vat on the goods, and the customer pays you vat which you then pay on to revenue (or put against vat paid for goods in the state)

JohnCleary

Deleted User wrote: »

The purchases you paid no vat on go in the zero rate column for intra EU. The sales you charge vat on locally go in the vat rate column for goods sold within the state. So, you pay no vat on the goods, and the customer pays you vat which you then pay on to revenue (or put against vat paid for goods in the state)

OK, just so i'm not getting myself in a twist... we have 2 aspects; Accounting Software (Wave online) & ROS VAT3 Return

ACCOUNTING SOFTWARE
Totally customisable, for basic config I created: 0 / 13.5 / 23

If i'm right from reading the Revenue link above, when I purchase an item.....
Within accounting software, I enter an Expense transaction with the total amount the item cost me from the UK (0% charged on that to me), and add 23% VAT within the expense.

Under the sales transaction (let's just assume no mark-up), I essentially enter the exact same thing, so it all balances out.

Am I right? If I can get my head round that first, i'll deal with the ROS entries after that.

JohnCleary

JohnCleary wrote: »

OK, just so i'm not getting myself in a twist... we have 2 aspects; Accounting Software (Wave online) & ROS VAT3 Return

ACCOUNTING SOFTWARE
Totally customisable, for basic config I created: 0 / 13.5 / 23

If i'm right from reading the Revenue link above, when I purchase an item.....
Within accounting software, I enter an Expense transaction with the total amount the item cost me from the UK (0% charged on that to me), and add 23% VAT within the expense.

Under the sales transaction (let's just assume no mark-up), I essentially enter the exact same thing, so it all balances out.

Am I right? If I can get my head round that first, i'll deal with the ROS entries after that.

No. You didn't pay 23%. You add vat to the sale, and pay that to Revenue, so you have the balance there. Think if you had made it instead. You sell with VAT, and pay the VAT to revenue

relax carry on

[Deleted User] wrote: »

No. You didn't pay 23%. You add vat to the sale, and pay that to Revenue, so you have the balance there. Think if you had made it instead. You sell with VAT, and pay the VAT to revenue

That's not the full picture.

When you carry out an ICA (use your vat number in the EU to purchase a good or service without being charged VAT) you must then self account for the vat in Ireland. In practice that works as the poster described. You add the vat to your purchases and the same amount to your sales. That's the self accounting bit. That allows your T1 and T2 figures per the VAT3 return to balance.

If you then sell the good you bought, you charge vat on the onward supply of that good.as normal. That's the normal sales bit. This bit is included in your T1 figure.

JohnCleary

[QUOTE=Deleted User;1088004

97]No. You didn't pay 23%. You add vat to the sale, and pay that to Revenue, so you have the balance there. Think if you had made it instead. You sell with VAT, and pay the VAT to revenue[/QUOTE]

So, in the table in the link: https://www.revenue.ie/en/vat/goods-and-services-to-and-from-abroad/acquisitions-from-other-eu-member-states/self-accounting-for-vat.aspx

For T2, eventhough I didn't actually pay any VAT, I still enter that I did? This makes no sense to me (And therefore assume I am wrong, as when I calculate VAT returns within my accounts package, the figures wouldn't add up)

JohnCleary

relax carry on wrote: »

That's not the full picture.

When you carry out an ICA (use your vat number in the EU to purchase a good or service without being charged VAT) you must then self account for the vat in Ireland. In practice that works as the poster described. You add the vat to your purchases and the same amount to your sales. That's the self accounting bit. That allows your T1 and T2 figures per the VAT3 return to balance.

If you then sell the good you bought, you charge vat on the onward supply of that good.as normal. That's the normal sales bit. This bit is included in your T1 figure.

Yeah, so this now makes sense, given from what i've read from Revenue (link above)

So, who's correct?

relax carry on

JohnCleary wrote: »

Yeah, so this now makes sense, given from what i've read from Revenue (link above)

So, who's correct?

That's correct however very few soletraders or companies fill it in correctly in my experience or at all. You can always drop an enquiry to the Revenue who will confirm it to you in writing if you wish. Incorrect operation of self accounting for vat can increase the risk of a Revenue intervention.

JohnCleary

relax carry on wrote: »

That's correct however very few soletraders or companies fill it in correctly in my experience or at all. You can always drop an enquiry to the Revenue who will confirm it to you in writing if you wish. Incorrect operation of self accounting for vat can increase the risk of a Revenue intervention.

I'll be going through EVERYTHING with an accountant before I start using this new package (Jan 1st). This is my research time (i've configured a test company within the accounts package). From this I will have queries etc... hence why i'm asking you guys

But yeah, your answer matches up perfectly with Revenue, so think I have that aspect sorted (hopefully! I'll still be bringing it up with accountant).

Thanks again.

JohnCleary

Mucking about, this is the only VAT Rates I have configured: I take it that this is totally wrong?


That I need to create different Taxes (even if same rate) for Ireland / Non-Ireland purchases? Found this spreadsheet on NUI Website: