Help Please

currywala
currywala New MemberRegistered Posts: 14
If a uk Vat reg company is suplying goods to another european country and reclaims VAT in Uk how will they account for them in the final accounts.
The money it reclaims back will it be shown as other income in the accounts.

Comments

  • Bluewednesday
    Bluewednesday Font Of All Knowledge Registered Posts: 1,624
    How is the UK supplier reclaiming VAT?
  • sdv
    sdv Experienced Mentor Registered Posts: 585
    currywala wrote: »
    If a uk Vat reg company is suplying.................and reclaims VAT in Uk ........................

    A company supplying good normally collects VAT from customers and pass it on to HMCE -ie credit VAT a/c as output tax

    If a UK company supplies to a European country, the vat will be a ZERO percent (if member of EC) or exempt.

    Threfore there will be no double entry for VAT in the suppliers accounts.
  • Bluewednesday
    Bluewednesday Font Of All Knowledge Registered Posts: 1,624
    This was my confusion, I couldn't see how you can supply and reclaim VAT
  • snowmarauder
    snowmarauder Feels At Home Registered Posts: 99
    we dont charge on way out, so it doesnt come into our accounts at all only the net, when the goods arrive their airside then they are charged vat in their country by customs on entry as they collect and vice versa. you pay it at customs then reclaim if you are the purchaser. Have a look at a vat form. It comes under reports and returns. Unit 5 I think. Inter.
    eg. we send 1000 net goods to france. we do not charge vat, it arrives in france and customs charge them 18% on goods received into the country. 180 pounds. they take their goods home and put the receipt through their vat. 1000 to creditors and 180 reclaimed on vat import. For us reverse. You can claim straight away in your current vat period.
  • Bluewednesday
    Bluewednesday Font Of All Knowledge Registered Posts: 1,624
    Why in this case don't you as the supplier reverse charge the sale and zero rate it.

    The customer would then pay and reclaim the VAT in the same VAT return. I am sure this is what usually happens with intra EU transactions between 2 VAT registered parties.

    Are you dealing with a product with different rules?
  • currywala
    currywala New Member Registered Posts: 14
    sdv wrote: »
    A company supplying good normally collects VAT from customers and pass it on to HMCE -ie credit VAT a/c as output tax

    If a UK company supplies to a European country, the vat will be a ZERO percent (if member of EC) or exempt.

    Threfore there will be no double entry for VAT in the suppliers accounts.

    So basically when doing the profit and loss account the reclaimed vat does not come into effect.and money paid out as VAT from bank is now back in the bank.
  • Bluewednesday
    Bluewednesday Font Of All Knowledge Registered Posts: 1,624
    If it is zero rated (as EU sales should be) there is no VAT to reclaim.

    No VAT has been charged.
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