Vat Return Box - help!

Celticgirl
Celticgirl Registered Posts: 4 New contributor 🐸
in AAT Level 3 (Level 6 in Scotland)
Hi
I have my VAT exam next week. We had a lesson on Thursday but the tutor was off and left us some work. One worksheet was completing a VAT Return. We all thought in here we included EU sales for both VAT registered and non-VAT registered companies. Is this right?

The answer said it was for VAT-registered customers ONLY but it doesn't state that on the VAT Return Form and the tutor who prepared the worksheet is known for making lots of mistakes in her answers and so I feel like I can't revise now this weekend because I don't understand what I am doing and I couldn't get in touch with any of the tutors yesterday either :(

Can anyone help?

Comments

  • mentorkeith
    mentorkeith Registered Posts: 74 Epic contributor 🐘
    Celticgirl wrote: »
    Hi
    I have my VAT exam next week. We had a lesson on Thursday but the tutor was off and left us some work. One worksheet was completing a VAT Return. We all thought in here we included EU sales for both VAT registered and non-VAT registered companies. Is this right?

    The answer said it was for VAT-registered customers ONLY but it doesn't state that on the VAT Return Form and the tutor who prepared the worksheet is known for making lots of mistakes in her answers and so I feel like I can't revise now this weekend because I don't understand what I am doing and I couldn't get in touch with any of the tutors yesterday either :(

    Can anyone help?

    Hi Celticgirl

    Here are the rules regarding the EU sales and purchases:

    1) EU sales (outside UK) are known as "despatches" NOT exports. Exports are related to sales outside the EU only.

    2) EU purchases (outside UK) are known as "Acquisitions" NOT imports. Imports are only related to purchases outside the EU

    3) All of the above are recorded as sales (output) or purchases (input) irrespective of whether there is VAT added. Those figures (1) and (2) are VAT exclusive figures - net from VAT. ALL sales are recorded in box 6, in box 8 you just enter the total EU sales for VAT registered customers Please see http://www.hmrc.gov.uk/vat/managing/returns-accounts/completing-returns.htm#4 How to complete box 8.

    4) VAT registered EU customers are NOT charged VAT - it is classed as zero rated sales. Neither are customers outside the EU

    5) Although EU suppliers do not charge UK customers VAT directly, HMRC expect the VAT to be reported as output and input tax. So, if the question states there is VAT on acquisitions (acquisitions NOT imports), then you need to enter the VAT into boxes 2 and 4 as output and input tax giving a net result of zero. I know it is odd but that is the way HMRC expect us to do it.


    7) If EU customers are not VAT registered then they WILL be charged VAT

    Here it is from the "horses mouth". Please read what HMRC says about filling out the 9 boxes - especially re boxes 2, 4, 6, 7, 8 and 9

    http://www.hmrc.gov.uk/vat/managing/returns-accounts/completing-returns.htm#4
  • mentorkeith
    mentorkeith Registered Posts: 74 Epic contributor 🐘
    There is another thread on indirect tax which may be useful as follows:

    http://forums.aat.org.uk/showthread.php?37296-Indirect-Tax-Help-please-exam-very-soon&p=267276#post267276
  • Celticgirl
    Celticgirl Registered Posts: 4 New contributor 🐸
    Hi

    I should have said above that it's specifically box 8 I am stuck on.

    I read the HMRC page and I couldn't really understand what I needed to know.

    On the worksheet we got, it had split non-registered EU customer sales totals and registered EU customers sales total. I thought I'd have to put BOTH those figures into box 8 but the answer said we didn't.
    As there was no tutor we couldn't ask anyone and we know this tutor has made a lot of mistakes on worksheets before, so it's really just box 8 I need clarification on.

    When you mentioned box 7 above for sales, did you mean box 8?

    Thanks.
  • mentorkeith
    mentorkeith Registered Posts: 74 Epic contributor 🐘
    Celticgirl

    Please read my item 3 within my comment again. I made a small error which I have now corrected. It should now make sense. Yes it should have said box 8
  • mentorkeith
    mentorkeith Registered Posts: 74 Epic contributor 🐘
    Sometimes they split the EU registered and non registered because they want you to calculate the VAT on the non registered EU customers. Sometimes the VAT figure for EU customers is given to you.

    If you multiply the non registered EU sales by 20% it should give you the Vat figure that has been supplied to you (if they did give it). Trust me, box 8 generally only includes total sales for VAT registered customers and DOES not include non VAT registered EU sales. Box 6 DOES include total sales inclusive of UK AND outside UK. Non VAT registered EU customers are charged VAT. This VAT is treated as if it was UK output tax and therefore is included in box 1.
  • mentorkeith
    mentorkeith Registered Posts: 74 Epic contributor 🐘
    Hi Celticgirl

    I have just reread through the HMRC website. I got something wrong. According to the website (therefore you must follow it) Sales to non VAT registered EU customers should not be entered in box 8 but should be included in box 6. This type of sale will be charged VAT at the UK VAT rate of 20%. Therefore, it is treated as if it was a UK sale, so the VAT goes into box 1 as UK output tax.

    Please note that I have made all the necessary modifications to my earlier posts.

Categories

Privacy Policy