Hi, what tax code would you use in Sage 50 Accounts v 23 for a sale invoice -it is a sale of transport services to another EU country, Seller is UK VAT register and buyer in another EU country is not VAT registered at all. The amount of invoice is £170. Thank you, Ellie
year end in Sage - not yet, I had few days off due to my health:( I'm back on track now.
VAT is not charged on the invoice. I didn't actually issue the invoice. This is something i was told about and I was wondering how I'd input it on Sage - as a learning curve. In this case the buyer wasn't VAT registered in their country but how would that look like if they were?
Ellie
Need to consider the place of supply and double check whether vat should've been charged or not. Check that out first as your description of 'transport' services needs further definition as thre are different rules under this sector. Also is the service to a business?
Once you know whether it should have been charged or not then pop back on. By then I might well be back in front of my sage.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi Joanne, the description on the invoice is: parcel transport service.The invoice itself seems to be a bit dodgy: no VAT number provided on either side (seller and buyer), but apparently they both are VAT registered (seller in the UK and the buyer in an European country). Tax says 0%. The parcel was transported from the UK.
I was searching for it online but I feel like I have a big mess now in my head :( generally I haven't dealt with EC transactions so the stuff I read seems to be a bit confusing.....
If the buyer wouldn't be a VAT registered I would put it as a T1 on Sage? Should now T22 be used? Since the tax shows 0% on the invoice should the invoice total be treated as gross amount?
Thank you
Ellie
If the supply is a 'service' and it is to a VAT registered customer the place of supply is where the customer is located. For your client it is outside the scope of VAT.
Should the transactions be the other way around, implement reverse charge method.
The term service is very, very broad.
-- Edited by abacus12345 on Tuesday 28th of February 2017 11:44:44 AM
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Regardless of what is on the invoice, its the invoice that needs to be sorted first and may need to be corrected. This is not a sage question until that has been sorted.
You mentioned you work for an Accountant Ellie - is this one of the Accountant's clients? Surely they as your boss and mentor should be guiding you on this one.
Its in part about knowing your customer. So what does the customers business actually do? What is it that they have supplied? It sounds like it could be a freight company, but I could be miles off the mark and reading something into this that isnt there. We are working a bit in the dark here so you may need to look beyond the invoice and find out what has actually occured.
Freight includes:
goods/cargo
mail
documents
unaccompanied vehicles, and
vehicles transported on ships, which are charged at a driver accompanied rate
So is it one of the above?
Once that has been determined or not (if not a fuller explanation given) then we can start to look at the otehr issues round VAT to see what impact there will be and what needs to be quoted on the invoice and then what needs to be keyed into Sage.
If your client is VAT registered there VAT details MUST be on the invoice for starters.
At least we know know this is to a business in the EU. Heading off this one at the pass - what is it they do (might help), what is their VAT number/which country are they based in?
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
this is a freight company - transport of goods (the seller), the buyer is based in Poland. My accountant is off this week and I thought I'd find some information before she returns. I'm not directly dealing with this, but was wondering how this is supposed to be done.... my'guess' here would be T22....would that be correct?
-- Edited by Ellie16 on Tuesday 28th of February 2017 08:07:13 PM
Hi Ellie
You need to take a step back and consider all of the factors pertaining to the case itself. We still do not have enough information, although we have come a long way from the vague (sorry!) description at the beginning so at least we now know what guidance to start looking at.
Plus we know its not passenger freight since you now mention goods. But where did those goods start out - just another small cog.
Thank you Joanne. The good were transported from here to Poland. I understand that the buyer will account for VAT in Poland, so the seller is 'outside the scope., therefore I'd use the T22 code. Would the seller have to complete an ESL too?
Bit you stated that the buyer is not vat registered. so should you not be accounting for vat under the B2C rules under place of supply? Therefore t1 call net, given for some reason your client didn't provide for vat and their own vat number on the invoice? Unless of course they have been given some other proof of status eg letter from Polish tax authorities to use the reverse charge process, although then I'm unsure how you could include on an etc sales list as that is driven by a vat number, ergo you need a vat number. Or this now a hypothetical q? Which would mean each case has to be determined on its merits anyway.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi Joanne, the description on the invoice is: parcel transport service.The invoice itself seems to be a bit dodgy: no VAT number provided on either side (seller and buyer), but apparently they both are VAT registered (seller in the UK and the buyer in an European country). Tax says 0%. The parcel was transported from the UK. I was searching for it online but I feel like I have a big mess now in my head :( generally I haven't dealt with EC transactions so the stuff I read seems to be a bit confusing..... If the buyer wouldn't be a VAT registered I would put it as a T1 on Sage? Should now T22 be used? Since the tax shows 0% on the invoice should the invoice total be treated as gross amount? Thank you Ellie
it turned out the buyer is also VAT registered, I read some information from Sage website and it looks like T22 would be used here, but also EC sales list should be sent to HMRC. I noticed that Sage does that too - EC sales list is under the VAT options. EC transactions - very complex subject!
Thank you for your input Joanne, your knowledge is very impressive!
Yes sage as EC sales option which makes life easier.
So yes T22 in this case (and option 3 on the EC sales list).
BUT - it is best practice to add the buyers VAT number on to the invoice as this gives the VAT inspectors the proof you need (**), plus make reference to reverse charge so a word of caution on that side to your clients perhaps. Also - the VAt number needs to be inclued on the customer tab in sage so it feeds into the EC sales list.
We have a UK based customer (they are a big name transport company) - we purchase their transport for their customer and transport from EU back to UK - which tax code is now used on sage 50?
