Which vat rate to use

This quick guide should point you in the right direction so that you know which rate to use in which situation: Xero No VAT — These transactions will not appear on your VAT returns.

QuickBooks QuickBooks VAT rates are very customisable so you may not have all of these available — or you may have extra ones. For examples of each of these, please refer to the Sage guide.

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Rates can change and you must apply any changes to the rates from the date they change. Print entire guide. Brexit Check what you need to do. Explore the topic Business tax VAT.

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VAT is then charged under the reverse charge mechanism. If the supplier has charged VAT on the goods purchased at the country of origin rate, you must show this on your invoice, but not on your VAT Return. In this case, the VAT Return needs to show the net element in box 7.

To enter this in Accounting, post the invoice with two separate item lines. One for the net element at zero rated and the other for the VAT element. Excludes transport and insurance costs, unless included in the price and not separately indicated on the invoice. Excludes additional taxes and charges identifiable by the customs authorities from any relevant documents. Applies to the total consignment value, not individual items within the consignment.

For more information see Postponed accounting for Great Britain businesses. This automatically applies postponed VAT on your invoice. The net amount is reported in box 7. For more information about using postponed accounting see Postponed accounting for Great Britain businesses.

There are a number of grey areas and complexities associated with the purchase of services and VAT. VAT calculates under the reverse charge mechanism. If the supplier has charged VAT on the service purchased at the country of origin rate, you must show this on your invoice, but not on your VAT Return.

The invoice is then charged under the reverse charge mechanism and the net amount appears in boxes 6 and 7 on the VAT Return. There are a number of grey areas and complexities in relation to VAT and the purchase of services.

Depending upon the response provided by HMRC, the transaction would be posted in one of the following ways:. Use the Standard VAT rate. The tax amount appears in box 4 and the net amount appears in box 7. The invoice must be posted as two separate transactions:. Chat to a Sage Ambassador.