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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Reverse VAT UK
Small and medium business | Business Central, N...
Suggested Answer

Reverse VAT UK

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Posted on by Enhanced Tech 19

Wonder if anyone can help.

I have setup Reverse Vat we are a UK based firm.  We have a customer who sells Mobile phones and Chips so the 5000 pounds theshold applies.

The Inventory Item has be set to Reverse Vat Applies.  The VAT code is setup with a 5000 threshold.  In Sales & Receivables I have noted the Reverse Charge Posting Group.

Yet when doing a Sales Invoice VAT is still being calculated for all values.

Where am I going wrong!!

I have the same question (0)
  • Ramit Paul Profile Picture
    Ramit Paul 22,797 Most Valuable Professional on at

    Hi,

    What do you mean by "VAT is still being calculated for all values."

    Can you give an example of accounting entry, how you want to setup.

  • Enhanced Tech Profile Picture
    Enhanced Tech 19 on at

    Just to Clarify the above.  Also with further investigation.  The Item code is set to use  Reverse Vat  and the Reverse Vat Posting group is set on the item.  The VAT Statement is updating correctly.

    The system is not  taking into account that on any Purchases for Mirco Chips or Mobile Phones if the Net amount of the Purchase Invoice is over 5000 it should be using the Reverse charge rules if under then it should charge VAT as normal.

    Business Central is not looking to the threshold and recognising this,  It is leaving the VAT amount Blank even if the purchase is over 5000.

  • Community member Profile Picture
    Community member 2 on at
    It looks like the system is still including VAT because the £5,000 threshold logic isn’t triggering. You may need to adjust your VAT posting setup or add custom rules so Business Central applies reverse charge only above the threshold.
    Thank you.....
  • Suggested answer
    DAnny3211 Profile Picture
    DAnny3211 11,397 on at

    Hi there,

    It sounds like you've configured most of the Reverse VAT settings correctly. However, one common issue that might cause VAT to still be calculated is the combination of the VAT Posting Setup and the Reverse Charge Posting Group.

    Please double-check the following:

    1. VAT Posting Setup: Ensure that the combination of VAT Business Posting Group and VAT Product Posting Group used in the invoice is linked to the correct VAT setup that includes the reverse charge logic and the threshold.

    2. Threshold Logic: The threshold of £5000 typically applies per transaction or per customer over a period. Make sure the system is evaluating the threshold correctly—some setups require customization or additional logic to enforce the threshold.

    3. Reverse Charge Posting Group: Confirm that this is correctly assigned to both the customer and the item, and that it’s triggering the reverse charge behavior in the VAT calculation.

    4. Sales Invoice Line Details: Sometimes, VAT is calculated based on the line-level setup. Make sure each line item is correctly marked for Reverse VAT.

    If all of the above are correctly configured and the issue persists, it might be worth checking if there are any customizations or extensions interfering with the standard VAT logic.

    Let me know if this helps, and please mark the response as helpful if it resolves your issue.

    Best regards!

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