Hi I was wondering if anyone knew a way round recording notional VAT on acquisitions from EU members.
MY understanding is that if you purchase a inventory item from an EU member you will be charged VAT at zero rate (ie no VAT).
If however the Inventory item would normally be subject to VAT at standard Rate in the UK you need to account for this on your Vat return by including a notional amount for the VAT at standard rate in box 2 and box 4 of the VAT return and therefore need a tax detail which calculates the VAT so that it can be added to these colums in the VAT daybook.
The problem is that in order for the EU suppliers Invoice to be recorded correctly it should not show VAT otherwise the accounts payable will be incorrect.
I have tried setting enabling reverse charge VAT in company options (although it is not correct for this type of transaction) so that the tax schedule applied to the transaction can contain 2 tax details a positive and negative tax amount which cancel out the VAT on the supplier invoice. This means however that the net amount is double counted and causes problems trying to post the payables transaction.
With so many UK importers using GP I guess there must be a way that this can be recorded. Any helpful pointers?
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