Question asked by Charline Hurst 9 years ago
Hi
HMRC have just brought telecoms services into the domestic reverse charge, rules.
How does Clearbooks handle this with effect of not charging VAT but having to sate on the invoice how much the VAT should be ?
Thanks
Charlie
Hi Charlie
Well spotted. Yes the team are aware of this but, at the moment, as this (and previous domestic RC VAT) effects so few users, there's no automatic wording available to make it clear that the customer has to account for the RC VAT and the amount of VAT that should be accounted for.
So I'd suggest this is quoted in the "Summary" box of the invoice and you might also want to change the label of the box in the Invoice theme to say something like "Reverse charge VAT".
HMRC suggests the wording to use here: https://www.gov.uk/government/publications/vat-notice-735-vat-reverse-charge-on-specified-goods-and-services/vat-notice-735-vat-reverse-charge-on-specified-goods-and-services#paper-invoices
Not perfect but hope that helps
Best answerHow do we allocate the VAT for this reverse charge?
e.g. I receive an invoice from a supplier who notes that the supply is reverse charge. I need to flag the reverse charge in clearbooks somehow so that at the end of the VAT period clearbooks will calculate how much VAT is due to HMRC from the reverse VAT invoices.
I would also much appreciate an answer to David Morris's question on allocating VAT for reverse charge, for example receiving an invoice that has reverse charge for Phones/Chips purchased domestically.
Hi Ben,
Actually I received an answer to a trouble ticket I raised. Here's the answer from clearbooks and it works for me. It's a bit of a pain but as long as you don't have too many purchase invoices each month with domestic reverse billed VAT then it's manageable:
-=-=-=- Thanks for contacting Clear Books support.
I have tested it in demo and tried the following steps. Works for me and see if it gives you what you are looking for.
Raise the supplier Invoice for £15750.18 as Goods and Services from UK supplier but 0% VAT.
Create a journal for the VAT. Debit and Credit the VAT control for £3,150.03. See screen shot below of journal and boxes to tick.
https://s3-eu-west-1.amazonaws.com/uploads-eu.hipchat.com/36185/2368368/yxmfHTUBwek1pqu/upload.png
This then seems to fulfill the requirements of HMRC by showing the VAT in boxes 1 and 4 and the purchases in box 7. See attached a test VAT return.
https://s3-eu-west-1.amazonaws.com/uploads-eu.hipchat.com/36185/2368368/chbVFXXWz1Zb2q0/upload.png
I hope that this has been helpful. If you need any further assistance feel free to get in touch.
Thanks David, very kind of you to share the solution so quickly!
You must 
