VAT on Imports and Exports in Great Britain

Modified on Wed, 30 Apr at 9:31 AM

The following VAT codes for Import/Export and Import 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 Fields on VAT return	INPUT Fields on VAT return
ZX	Zero Rate Export	0	1,6	n/a
ZI	Zero Rate Import	0	n/a	4,7
ZES	Zero Rate EU Services	0	6	1,4,6,7
SES	Standard Rate EU Services	20	n/a	1,4,6,7
ZEG	Zero Rate EU Goods	0	6,8	2,4,7,9
SEG	Standard Rate EU Goods	20	n/a	2,4,7,9
ZIR	Zero Rate Import Reverse Charge	0	n/a	1,4,7
SIR	Standard Rate Import Reverse Charge	20	n/a	1,4,7

Sale of Goods

The sale of goods from GB to overseas are Zero rated so the VAT code ZX should be used.

Purchase of Goods

The treatment of purchases of goods from overseas into GB depends on the value of the invoice and whether you use Postponed VAT Accounting (PVA).

PVA means you declare and recover import VAT on the same VAT return rather than having to pay it upfront when the goods are imported and recover it later. PVA is not applicable to invoices <£135.

For a purchase invoice <£135 and zero rate VAT use the ZIR code.

For a purchase invoice <£135 and standard rate VAT use the SIR code.

For a purchase invoice >£135 when using PVA, use ZIR or SIR as above.

For a purchase invoice >£135 when not using PVA, use ZI. VAT will be recorded when a Statement is received from HMRC or when charged by the import agent.

Sale of Services

The sale of services from GB to countries in the EU are Zero rated so the VAT code ZES should be used.

The sale of services from GB to countries outside of the EU are Zero rated so the VAT code ZX should be used.

Purchase of Services

When you buy services from suppliers in other countries the Reverse Charge applies.

For a purchase invoice with zero rate VAT use the ZIR code.

For a purchase invoice with standard rate VAT use the SIR code.

VAT reversal

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 Total VAT and the negative Reversed VAT.

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

Contra transactions

Transactions which use ZX VAT will default to Output VAT and this cannot be changed to Input even if a contra amount is entered on the invoice.

Transactions which use ZI,ZIR or SIR will default to Input VAT and this cannot be changed to Output even if a contra amount is entered on the invoice.

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’.

Example:

Standard Rate Import Reverse Charge. You can choose to show the Reversed VAT amount field on the Item line by selecting that field from the Choose Columns icon.

Total VAT and the negative Reversed VAT show on the bottom line: