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Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
Ec Vat Changes 2010 Aks Changes 12.11.2009
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Ec Vat Changes 2010 Aks Changes 12.11.2009

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  • 1. ec VAT changes 2010
  • 2. reverse charge on purchases <ul><li>under the reverse charge mechanism, purchaser of the goods is liable to account for the VAT on the supply </li></ul><ul><li>purchaser will account for VAT as if purchasing in their own country </li></ul><ul><li>supplier will not charge nor account for VAT on the supply </li></ul><ul><li>supplier must state on the invoice that VAT is to be accounted for by the purchaser under reverse charge </li></ul>maconomy.com
  • 3. reverse charge wording on sales <ul><li>precise wording is not prescribed in law but HMRC website suggest keeping the annotation short </li></ul><ul><li>suggested forms of words are: </li></ul><ul><ul><ul><li>reverse charge supply - customer to pay the VAT </li></ul></ul></ul><ul><ul><ul><li>Customer to pay VAT under EC VAT reversal </li></ul></ul></ul><ul><ul><ul><li>VAT reverse charge procedure is applicable for customers within the EC </li></ul></ul></ul>maconomy.com
  • 4. reverse charge <ul><li>example: uk receiving invoice from an EC country </li></ul>maconomy.com
  • 5. customer recording invoice <ul><li>VAT has to be recorded as if you are purchasing in your own country e.g. in UK </li></ul><ul><li>postings in maconomy: </li></ul><ul><ul><li>Assume EUR 1 = GBP 1 </li></ul></ul>maconomy.com
  • 6. tax set up change in maconomy <ul><li>EU purchase vat code needs to be changed: </li></ul><ul><ul><li>Menu: general ledger > tax > gl tax codes </li></ul></ul>maconomy.com
  • 7. gl tax codes maconomy.com <ul><li>Optional – you may want to create 2 new codes: </li></ul><ul><ul><li>Purchases EU Goods Rev </li></ul></ul><ul><ul><li>Purchases EU Services Rev </li></ul></ul>make the changes to your existing EU VAT code tick EU Acquisition box enter the standard UK VAT rate NB: this will be 17.5% on Jan 1st enter gl code for the reversing entry – this can be the same as the Tax reference above but for ease of reconciliation use a different gl code
  • 8. VAT return <ul><li>credit your VAT account with an amount of output tax calculated on the full value of intra–EC taxable supplies </li></ul><ul><li>same time debit your VAT account with the input tax </li></ul><ul><li>on VAT return: </li></ul><ul><ul><li>the amount of output tax in box 2 VAT due on EU acquisitions </li></ul></ul><ul><ul><li>the amount of input tax in box 4 VAT reclaimed on purchases including EU acquisitions </li></ul></ul><ul><ul><li>the full value of the supply in box 6 total value of sales </li></ul></ul><ul><ul><li>the full value of the supply in box 7 total value of purchases </li></ul></ul>maconomy.com
  • 9. VAT return maconomy.com 0.00 150.00 150.00 150.00 0 0 1,000.00 0 1,000.00
  • 10. expense sheets <ul><li>expenses generally come under ‘Use & Enjoyment’ VAT rules </li></ul><ul><li>exempt from the reverse charge process </li></ul>maconomy.com
  • 11. your action list <ul><li>Set up required EU VAT codes </li></ul><ul><li>MPL’s </li></ul><ul><ul><li>change to add the ’reverse charge’ wording for EC services </li></ul></ul><ul><li>customer VAT number </li></ul><ul><ul><li>collect and validate the VAT numbers: http://ec.europa.eu/taxation_customs/vies/ </li></ul></ul><ul><ul><li>if no VAT number, must charge UK VAT </li></ul></ul><ul><li>review contracts </li></ul><ul><ul><li>check customer contracts regarding charging reversing VAT </li></ul></ul><ul><li>staff training </li></ul><ul><ul><li>prepare accounts payable and billing staff for the changes </li></ul></ul>maconomy.com
  • 12. one last thing to remember... <ul><li>uk VAT standard rate returns to </li></ul><ul><li>17.5% </li></ul><ul><li>on 1 st January 2010 </li></ul>maconomy.com
  • 13. hmrc 2010 advise line... <ul><li>0845 010 9000 </li></ul><ul><li>will need your VAT registration number </li></ul>maconomy.com

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