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VAT on EU acquisitions

Hi there,

Can someone please explain to me in which boxes VAT and net figures go for EU acquisitions?

I understand that I zero rate the VAT where the EU business is VAT registered. I understand that the VAT element of the EU acquisition will be declared in box 2 of the VAT return. However do I also have to account for it in box 4?

As for the net element of the acquisition, do I include this in my box 6 (total net sales) as well as box 8 or 9? I am getting confused.

Thanks in advance for any help :)
AAT Level 3 :)

Comments

  • KoopaCooperKoopaCooper London, UKMAAT, AATQB Posts: 225
    Hi Amy,

    Yes, the VAT element of all EU acquisitions is included in both box 2 and box 4. This way, it's included on the form as its own amount (in box 2, added to output VAT) and then cancelled out again (by being included in box 4, input VAT), so overall it's zero-rated. :)

    And yes, the net element of the acquisition is included in boxes 7 and 9.

    Hope that helps you out. :) Good luck with your ITAX exam!
    Accounts Executive, ғɪᴀʙ ᴍᴀᴀᴛ
    QBO & Xero certified advisor

    AAT
    Level 2 Certificate in Accounting - 17 Jun 2015
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    Level 4 Diploma in Accounting - 19 Dec 2017
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  • amy256amy256 Registered Posts: 32
    Many thanks :)

    Im still not following... Getting the practice questions wrong where EU acquisitions are concerned.

    I don't understand why it just states acquisitions on the VAT form and not dispatches too....is Box 2 sales TO the EU?

    All the terminology is just really confusing me. Getting a headache! :s
    AAT Level 3 :)
  • KoopaCooperKoopaCooper London, UKMAAT, AATQB Posts: 225
    No, box 2 really is for acquisitions FROM the EU.

    EU acquisitions and dispatches are both zero-rated, but if you used dispatches in box 2 and included acquisitions in the box 4 figure, they wouldn't usually cancel each other out.

    But because for some reason (I don't fully understand why either), HMRC want the acquisitions figure included on the form, they have to have it on both sides of the equation (ie. in boxes 2 and 4) to balance itself out.
    Does that make sense?

    Don't give up, you'll get there! :)
    Accounts Executive, ғɪᴀʙ ᴍᴀᴀᴛ
    QBO & Xero certified advisor

    AAT
    Level 2 Certificate in Accounting - 17 Jun 2015
    Level 3 Diploma in Accounting - 22 Jan 2016
    Level 4 Diploma in Accounting - 19 Dec 2017
    MAAT - 27 Mar 2018

    ACCA
    Advanced Diploma in Accounting and Business...
    F4 Corporate and Business Law - 4 Jun 2019
    F5 Performance Management - 15 July 2019
    F6 Taxation (United Kingdom) - 3 Dec 2019
    F8 Audit and Assurance - 2 Mar 2020
  • amy256amy256 Registered Posts: 32
    Thanks :) I passed my Indirect Tax exam yesterday! =)
    AAT Level 3 :)
  • bushrabushra Registered Posts: 25
    Hi I booked my ITax exam next week and just wondered if anyone knew what the pass rate?
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