VAT treatment on digital item purchased from USA

Question asked by Natalie Collinson 3 years ago

Is anyone able to offer some guidance on how best to reconcile the following...

I've recently purchased a low-cost digital item (design file) from a USA website.

The invoice is in USD and the GBP equivalent is outstanding on Clearbooks.

The file is for our own business use, and the file is not for resale.

How do I account for this for VAT purposes?

There is no tax reference on the invoice - simply the total dollar amount.

Thank you.

3 Replies

Clear Books Employee

792 entries

Hi Natalie,

This would be recorded as services imported. I hope this helps.

All the best,

Mohamed.

3 years ago

Natalie Collinson

33 entries

That was fast, thank you Mohamed :)

To clarify - would that be Services Imported - Reverse Charge along with the default Zero Rate?

Thank you.

3 years ago

Clear Books Employee

792 entries

Hi Natalie,

That is correct!

All the best,

Mohamed.

3 years ago