VAT Reverse Charge

[Newchodge]

I have purchased some software from a German supplier. Both they and I are VAT registered/ They have quoted my VAT number on their invoice, which shows total prive of £20.83 and VAT as 0% and states that the Recipient has to account for VAT.

So far, so good, I understand that is what should happen, however what do I actually need to do? Do I declare input and output VAT on my return? Is that 20% of the total on the invoice, or is the total on the invoice deemed to be the VAT inclusive amount? How do I put it through my accounts software so that the VAT return is produced appropriately?

Or can I just do nothing?

 

[StevensOnln1]

You have to account for it as if you'd sold the software to yourself. 20% VAT (£4.17) should be added to your output VAT and then reclaimed on your input VAT, net effect being zero but still needs to be reported. Your accounting software will probably have a VAT code or option to handle it.

 

[MyAccountantOnline]

I have purchased some software from a German supplier. Both they and I are VAT registered/ They have quoted my VAT number on their invoice, which shows total prive of £20.83 and VAT as 0% and states that the Recipient has to account for VAT.

So far, so good, I understand that is what should happen, however what do I actually need to do? Do I declare input and output VAT on my return? Is that 20% of the total on the invoice, or is the total on the invoice deemed to be the VAT inclusive amount? How do I put it through my accounts software so that the VAT return is produced appropriately?

Or can I just do nothing?

As mentioned above most software will deal with it. What software do you use? If its one I use I'll gladly explain how it's done, if not someone else may be able to help.

 

[Newchodge]

As mentioned above most software will deal with it. What software do you use? If its one I use I'll gladly explain how it's done, if not someone else may be able to help.

Thanks very much - I found it in the help section. All done.

 

[Newchodge]

You have to account for it as if you'd sold the software to yourself. 20% VAT (£4.17) should be added to your output VAT and then reclaimed on your input VAT, net effect being zero but still needs to be reported. Your accounting software will probably have a VAT code or option to handle it.

Thank you. That worked.