EU and Reverse Charge VAT

Modified on Thu, 28 Nov, 2024 at 5:08 PM

The data is issued with reserved VAT codes that cannot have their VAT Rate or VAT Type changed, however the Code and Name may be changed if required.

Further VAT codes are required when trading with the EU and when using Reverse Charge VAT:

EU Goods	EU Goods	9	Output	NET (Box 6) and (Box 8) (No VAT)	Use for sales of goods to the EC when based in Northern Ireland and the customer has provided their EC VAT registration number. Always 0%
		10	Input	VAT (Box 2) and (Box 4), NET (Box 7) and (Box 9)
EU Services	EU Services	11	Output	NET (Box 6) (No VAT)	Always 0%
		12	Input	VAT (Box 1) and (Box 4), NET (Box 6) and (Box 7)
Reverse Charge	Reverse Charge	13	Output	N/A	N/A
		14	Input	VAT (Box 1) and (Box 4) NET (Box 7)	Applicable to purchase of Goods from Outside GB or for NI outside the EU
Domestic Reverse Charge	Domestic Reverse Charge	15	Output	NET (Box 6) (No VAT)	The Sales invoice must show the rate/amount of VAT that would normally be charged, however, no VAT is applicable so nothing is to be shown in box 1 of the VAT Return.
		16	Input	VAT (Box 1) and (Box 4) NET (Box 7)

The following VAT codes for EU VAT and Reverse Charge VAT are already set up but these codes may not be relevant to many users therefore they are non-active and the user can make them active if needed.

VAT Code	VAT Name	Notional VAT	OUTPUT	INPUT	VAT Type
ZX	Zero Rate Export	0	1,6	n/a	Normal
ZI	Zero Rate Import	0	n/a	4,7	Normal
ZIR	Zero Rate Import Reverse Charge	0	n/a	1,4,7	Reverse Charge
SIR	Standard Rate Import Reverse Charge	20	n/a	1,4,7	Reverse Charge
ZES	Zero Rate EU Services	0	6	1,4,6,7	EU Services
SES	Standard Rate EU Services	20	n/a	1,4,6,7	EU Services
ZEG	Zero Rate EU Goods	0	6,8	2,4,7,9	EU Goods
SEG	Standard Rate EU Goods	20	n/a	2,4,7,9	EU Goods
SDR	Standard Rate Domestic Reverse Charge	20	6	1,4,7	Domestic Reverse Charge
RDR	Reduced Rate Domestic Reverse Charge	5	6	1,4,7	Domestic Reverse Charge

For VAT transactions which use EU Goods VAT type and therefore effect box 8 or 9 of the VAT Return, these transactions will always show on the VAT Return based on invoice date regardless of the company's VAT basis.

Where a VAT code has been used on the entry screen which will result in a VAT reversal, this will be shown with the totals at the bottom of the screen as VAT Reversal.

The current VAT total will include the VAT amount based on the notional VAT Rate.

Invoice templates

Where a vat code with VAT type Domestic Reverse Charge has been used, the Sales invoice template will display the Notional VAT rate and text stating ‘VAT to be paid by you to HMRC’.

The same on the self-bill invoice template except the text will state ‘VAT to be paid by us to HMRC’.