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VAT only invoice - on a vat return

(11 Posts)
TracyK Sun 02-Oct-11 11:18:20

Am I right in thinking that I put the input vat in Box 4 and then leave box 7 as zero? (assuming this was the only invoice for the quarter).

TalkinPeace2 Sun 02-Oct-11 20:43:17

When were you billed / did you bill the goods?

TracyK Mon 03-Oct-11 07:28:02

Its vat on an import from China - so the green vat input form from HMCE.

TalkinPeace2 Mon 03-Oct-11 12:48:36

Import VAT counts as a normal cost of sale
you cannot reclaim it through your UK VAT return.
It's part of the goods value.

mranchovy Mon 03-Oct-11 18:04:22

Of course you can reclaim UK VAT charged on imports (assuming you could reclaim the VAT if purchased in the UK), but it is not as simple as including the amount on the customs form on your VAT return I am afraid.

The full story is in this HMRC document, but briefly (!):

(i) you need to register with HMRC under the Economic Operator Registration and Identification (EORI) Scheme.
(ii) You need to give your EORI number to the import agent
(iii) The import agent sends details of the transaction to HMRC
(iv) HMRC compiles the transactions and send you a form C79 at the end of the month
(v) You use the C79 as evidence of Input VAT and include the amounts in your VAT return box 4 and box 7 as normal.

Assuming the transaction has already happened without going through your EORI number, I suggest you call HMRC for advice.

TalkinPeace2 Mon 03-Oct-11 18:11:16

But where stuff is coming through the post / courier etc and only on an occasional basis (as many of the ebay business sellers I've discussed this with over the years do) 'tis much easier to just gross up the purchase cost

TracyK Mon 03-Oct-11 22:50:45

I think he has the EORI number since he gets the C79 when imports happen. But does the amount go in box 4 AND 7 - is box 7 not just for the 'goods' net of vat - ie zero?

mranchovy Tue 04-Oct-11 01:35:55

Oh sorry, misread what you were asking. The instructions for box 7 read:

"Box 7: your total purchases excluding VAT

Enter the total figure for your purchases (excluding VAT) for the period, including:

the purchases on which you paid the VAT you put in box 4"

... so as the VAT is going in box 4, the net amount of the purchase goes in box 7. The net amount isn't on the C79 of course so you will have to include it some other way but I wouldn't lose sleep over it - Box 6 & 7 are only used for vague 'statistical purposes' AFAIK.

TracyK Tue 04-Oct-11 08:11:48

I am waiting for a letter from HMCE as it gave me an error message of 'seems disproportionate' amount in 7 in relation to 4. I didn't know whether I was sposed to calculate what the purchases 'should be' working backwards from the input vat amount. iykwim?
I'm anticipating a wee visit as my client has been on a repayment basis now for almost 2 years due to selling nothing!

mranchovy Tue 04-Oct-11 20:51:12

But the cost of the goods should have ended up in box 7 anyway? Or was this in a different VAT period?

TracyK Tue 04-Oct-11 23:06:53

Diff vat period (I can't get him to quite get the hang of buy, pay and claim all in the same qtr!!

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