0% VAT Purchase (UK) - Expense purely for business use

JohnCleary

Hi all,
Sole Trader, registering for VAT on 01/01/2019.

I have gotten my head around Intra-EU purchases (0%) for re-sale (Self Tax).

However, what if i'm purchasing an item NOT for re-sale, which will be used purely for business purposes. In this example, I will be purchasing a phone from UK (0% VAT) purely for business use (I have a separate personal phone).

When I log this as an expense, do I put 0% (or leave blank) in the VAT field? Or, like Self Tax, do I add Irish VAT 23%?

Don't slate me, VAT is new to me, been spending the last month researching Thanks all.

thegolfer

JohnCleary wrote: »

Hi all,
Sole Trader, registering for VAT on 01/01/2019.

I have gotten my head around Intra-EU purchases (0%) for re-sale (Self Tax).

However, what if i'm purchasing an item NOT for re-sale, which will be used purely for business purposes. In this example, I will be purchasing a phone from UK (0% VAT) purely for business use (I have a separate personal phone).

When I log this as an expense, do I put 0% (or leave blank) in the VAT field? Or, like Self Tax, do I add Irish VAT 23%?

Don't slate me, VAT is new to me, been spending the last month researching Thanks all.

Same principal, you become the accountable person here in Ireland, and account for the VAT here, so add Vat on then take a deduction.

Technically a paper transaction. And no cost to you.

If the phone was for personal use, then you would not get a deduction of the VAT

JohnCleary

thegolfer wrote: »

Same principal, you become the accountable person here in Ireland, and account for the VAT here, so add Vat on then take a deduction.

Technically a paper transaction. And no cost to you.

If the phone was for personal use, then you would not get a deduction of the VAT

Many thanks.

So, say i'm making a declaration on my VAT3 on ROS. For the sake of easy accounting, let's say a phone from the UK @ 100 is my only purchase.

On E2 (Intra-EU acquisition of Goods), I enter 100

What do I do for T1 / T2?

Where I get confused, is that I am NOT re-selling this item, i'm keeping it for business use. I'm essentially confused as to where I deduct, as you mention above.

If it were for re-sale, this example makes perfect sense: https://www.revenue.ie/en/vat/goods-and-services-to-and-from-abroad/acquisitions-from-other-eu-member-states/self-accounting-for-vat.aspx

Or do I just do it in the same manner as above?

thegolfer

JohnCleary wrote: »

Many thanks.

So, say i'm making a declaration on my VAT3 on ROS. For the sake of easy accounting, let's say a phone from the UK @ 100 is my only purchase.

On E2 (Intra-EU acquisition of Goods), I enter 100

What do I do for T1 / T2?

Where I get confused, is that I am NOT re-selling this item, i'm keeping it for business use. I'm essentially confused as to where I deduct, as you mention above.

If it were for re-sale, this example makes perfect sense: https://www.revenue.ie/en/vat/goods-and-services-to-and-from-abroad/acquisitions-from-other-eu-member-states/self-accounting-for-vat.aspx

Or do I just do it in the same manner as above?

It's the same treatment, for business purposes. T1 is 23 and t2 is 23 Euro. Being 100 at 23%

JohnCleary

thegolfer wrote: »

It's the same treatment, for business purposes. T1 is 23 and t2 is 23 Euro. Being 100 at 23%

Many thanks. Wasn't sure what the craic would be as the product is not for re-sale.

the_pen_turner

do the uk supplier then send something to revenue to conferm the vat rate or is it just down to you to self asses.

JohnCleary

the_pen_turner wrote: »

do the uk supplier then send something to revenue to conferm the vat rate or is it just down to you to self asses.

I'm assuming it's self assessment, as Revenue define it as "Self Tax". The VAT rate from the UK will be 0%, not sure why that would need confirmation?!


I do have one other question which i'll need to get my head round...
OK, so I can keep a log of expenses for ROS VAT3 return, but i'll need to come up with a way to get my accounting package (Wave) to balance the VAT books.

If I was buying something for re-sale, it'd go down as an expense, and then would balance when I create an Invoice for a customer. But in this example, there will be no Invoice for a customer, so wondering how, for anyone else, do you 'balance the VAT book'??

I'm a little stumped with this (or overlooking something), up until now, everything has made sense and Wave has been a pretty cool cloud package (all web based)

the_pen_turner

JohnCleary wrote: »

I'm assuming it's self assessment, as Revenue define it as "Self Tax". The VAT rate from the UK will be 0%, not sure why that would need confirmation?!


I do have one other question which i'll need to get my head round...
OK, so I can keep a log of expenses for ROS VAT3 return, but i'll need to come up with a way to get my accounting package (Wave) to balance the VAT books.

If I was buying something for re-sale, it'd go down as an expense, and then would balance when I create an Invoice for a customer. But in this example, there will be no Invoice for a customer, so wondering how, for anyone else, do you 'balance the VAT book'??

I'm a little stumped with this (or overlooking something), up until now, everything has made sense and Wave has been a pretty cool cloud package (all web based)

not familier in any way with wave, surely there is a section for expenses or overheads

JohnCleary

the_pen_turner wrote: »

not familier in any way with wave, surely there is a section for expenses or overheads

I must be having a brain fart... of course I just put in the expense, but add 23% VAT, so that's grand.... i've 'paid' VAT on a purchase.... so that's T2 sorted.

What I can't get my head round, is how to tell my accounts package to calculate (and balance) T1 (VAT on Sales), as there will be no sale if it's for business use (ie not re-sale).