Intra-EU - Accounting for 0% VAT UK Purchase on an expense (not for re-sale)

JohnCleary

Hi all,
I'm aware of reverse charge VAT / recording Intra-EU purchases when it comes to VAT3 return on a purchase.

However, what if this item is not for re-sale? (ie. I am purchasing some electronic tools purely for work). - It is a business expense.

Do I still add the (23% IRL VAT Rate) for reverse charge VAT?
- If YES, how do I balance the VAT with my accounts software? (I use Wave)
- If NO, do I put down the expense with no VAT charge?


Do I still enter the amount in Intra-EU purchase (On my VAT3 return)

Happy4all

Yes, its still recorded as an ICA. Not familiar with wave software. On your VAT RTD you will distinguish between ICAs for resale and non-resale

JohnCleary

Thanks for the reply.

I'm still sort of confused.

As a sole trader, i'll be paying my VAT bi-monthly. So, for Jan / Feb 2019, i'll submit my VAT figures before 19th March 2019.

In this return,
1) Do I add the VAT figures by way of reverse charge VAT? ie. add 23% on my VAT3 to T1 & T2
2) Add the total of these purchases (which I haven't paid VAT on) to E2?

With my accounting software, Wave, to keep things balanced, I will just enter 0% VAT on the expense, and keep a separate spreadsheet of the UK purchases - That way I can get the figures for above entries (from my accounting software) and add the figures in the spreadsheet, thus giving me figures to enter to my VAT3. This may seem cumbersome, but UK purchases will only be approx 20 per year, so manageable.

I'm new to VAT and wasn't aware of the RTD annually, thanks for the heads up. I'm learning day by day.

Paddy001

JohnCleary wrote: »

Thanks for the reply.

I'm still sort of confused.

As a sole trader, i'll be paying my VAT bi-monthly. So, for Jan / Feb 2019, i'll submit my VAT figures before 19th March 2019.

In this return,
1) Do I add the VAT figures by way of reverse charge VAT? ie. add 23% on my VAT3 to T1 & T2
2) Add the total of these purchases (which I haven't paid VAT on) to E2?

With my accounting software, Wave, to keep things balanced, I will just enter 0% VAT on the expense, and keep a separate spreadsheet of the UK purchases - That way I can get the figures for above entries (from my accounting software) and add the figures in the spreadsheet, thus giving me figures to enter to my VAT3. This may seem cumbersome, but UK purchases will only be approx 20 per year, so manageable.

I'm new to VAT and wasn't aware of the RTD annually, thanks for the heads up. I'm learning day by day.

Hi John,

The fact the goods are for resale or not have no impact on T1 and T2. You will add the VAT amount to both T1 and T2 so that there is no resultant net liability or refund as normal. This is on the assumption your business has 100% VAT recovery.

You then put the figure in one of the four statistical boxes at the bottom for reporting EU acquisitions.

In brief, the fact it is not for resale does not impact any of your filings except for the annual return of trading details (RTD).

JohnCleary

Thanks for the clarification, that clears things up and means I can go with my proposal to have a separate spreadsheet for Intra-EU purchases for expenses (so as not to confuse my accounting package).

While I have you, may I ask the following re. RTD...
My tax / trading year is 1/1 to 31/12

For 2019, do I complete my RTD on 31/12? Or is there a 'submit by' date? (ie. like VAT, you pay by the 19th of the following 2 months)

Paddy001

JohnCleary wrote: »

Thanks for the clarification, that clears things up and means I can go with my proposal to have a separate spreadsheet for Intra-EU purchases for expenses (so as not to confuse my accounting package).

While I have you, may I ask the following re. RTD...
My tax / trading year is 1/1 to 31/12

For 2019, do I complete my RTD on 31/12? Or is there a 'submit by' date? (ie. like VAT, you pay by the 19th of the following 2 months)

Hi John,

It is due by the 23rd of January on ROS so you should have loads of time

JohnCleary

Paddy001 wrote: »

Hi John,

It is due by the 23rd of January on ROS so you should have loads of time

Thank you very much for all your help!