ec VAT changes 2010
reverse charge on purchases <ul><li>under the reverse charge mechanism, purchaser of the goods is liable to account for th...
reverse charge wording on sales <ul><li>precise wording is not prescribed in law but HMRC website suggest keeping the anno...
reverse charge <ul><li>example:  uk receiving invoice  from an EC country </li></ul>maconomy.com
customer recording invoice <ul><li>VAT has to be recorded as if you are purchasing in your own country e.g. in UK </li></u...
tax set up change in maconomy <ul><li>EU purchase vat code needs to be changed: </li></ul><ul><ul><li>Menu: general ledger...
gl tax codes maconomy.com <ul><li>Optional – you may want to create 2 new codes: </li></ul><ul><ul><li>Purchases EU Goods ...
VAT return <ul><li>credit your VAT account with an amount of output tax calculated on the full value of intra–EC taxable s...
VAT return maconomy.com 0.00 150.00 150.00 150.00 0 0 1,000.00 0 1,000.00
expense sheets <ul><li>expenses generally come under ‘Use & Enjoyment’ VAT rules </li></ul><ul><li>exempt from the reverse...
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 ’rev...
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  ...
hmrc 2010 advise line... <ul><li>0845 010 9000 </li></ul><ul><li>will need your VAT registration number </li></ul>maconomy...
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Ec Vat Changes 2010 Aks Changes 12.11.2009

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Ec Vat Changes 2010 Aks Changes 12.11.2009

  1. 1. ec VAT changes 2010
  2. 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. 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. 4. reverse charge <ul><li>example: uk receiving invoice from an EC country </li></ul>maconomy.com
  5. 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. 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. 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. 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. 9. VAT return maconomy.com 0.00 150.00 150.00 150.00 0 0 1,000.00 0 1,000.00
  10. 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. 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. 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. 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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