VAT on sales and purchsae

Marianne1975 Registered Posts: 1
We have various transactions were VAT isn't applied and I need help to clarify what these items should be coded as for VAT purposes. The transaction types are:

1. Purchase/sales outside of the EU (no VAT has been charged)
2. Purchase inside of the UK where VAT has not been charged
3. Purchase outside the UK but inside the EU where VAT has not been charged

Are they No VAT, Zero rated, exempt income/expenses etc.

If anyone could help that would be great.



  • KoopaCooper
    KoopaCooper Registered Posts: 224
    Okay, well taking them in order:

    1) Outside the EU is outside the scope of VAT, so you're spot-on with No VAT.

    2) This one is a bit more murky; depending on the particular transaction, it could be 0% or it could be Exempt. Some things (e.g. insurance, postage, travel fares) are exempt. Most of the rest are 0%. There's a fairly complete list available on HMRC's website:

    3) Again, can be a few cases:

    A sale to the EU would be at 0% for you. Because you are VAT registered, the EU customer would account for their purchase from you under the reverse charge scheme.

    A purchase from the EU depends on whether the supplier is VAT registered or not.
    If they are not, then it's a 0% transaction.
    If they are and they charged you their country's equivalent of VAT, then you would have to reclaim it in their country.
    If they are but they did not charge you their equivalent of VAT, then you would account for it under the reverse charge scheme (in which case it has no net effect on your VAT anyway).

    I hope all of this has been fairly clear. :)
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