VAT report

Question asked by Jonathan Danan ACA 9 years ago

We are now using the FRS VAT scheme in conjunction with the cash based turnover scheme. The quarters report produced by clearbooks in now including figures in box 4 for VAT claimed on purchases when this should be zero. The net effect is zero since clearbooks is also grossing up box 1 by the same figure. All very strange. I don't mind just clicking submit but will HMRC later on reject this since they cannot see that the effect is nil. I suspect this query is or you Paul. Its complex. cheers!

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3 Replies

Hi Jonathan - almost certainly these are reverse charge purchases, ie purchases where someone has used the VAT treatments "services from EU supplier" or "services from supplier outside EU"

Such purchases are required to be disclosed in boxes 1 & 4 at 20% notional VAT, as well as in boxes 6 & 7, whether FRS registered or not.

Hope that helps.

Best answer
9 years ago

OK Paul /Latha. Thanks for that. Strange to have a box 4 figure on an FRS scheme, but who am I to comment. Only an FCA who should perhaps know better.

9 years ago

Thanks Paul. Very clearly explained as usual.

Reverse charge with FRS VAT scheme does confuse many customers.

Best regards

Latha

9 years ago

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