Setting up domestic reverse charge VAT codes

This topic applies to setting up VAT codes for goods and services other than mobile phones or computer chips under the Domestic Reverse Charge mechanism, for example for building and construction. Instructions for Reverse Charge Sales of mobile phones or computer chips are included in the Setting Up Domestic Reverse Charge for Reverse Charge Sales Help topic.

See the Domestic Reverse Charge accounting mechanism Help topic for background information.

Sales VAT codes

These VAT codes must update only Box 6 (Value of Sales) on the VAT Return.

After the VAT codes have been created they are available in the Sales Ledger, Sales Order Processing, Invoicing and Importer modules.

  1. Open the System folder and click VAT Processing or click the Administration tab on the Ribbon Bar and then click System - VAT Processing. Select VAT Codes.

  2. Select the icon on the toolbar or press CTRL+N.

  3. In the Country Type box, select 'H' for Home country.

  4. In the Trans. Type box, select 'V' for 'Reverse Charge Sale'.

  5. In the VAT Code box, enter a number or letter to identify the code. This must be a code that is not already used. Then enter a description for the VAT code.

  6. Enter the VAT rate and date. The VAT rate is used to calculate the reverse charge VAT on the customer invoice.

  7. Select the Domestic Reverse Charge option so that the RCSL report is not updated when the VAT code is used.

  8. Select the icon on the toolbar or press CTRL+S.

Purchase VAT codes

These VAT codes must update Box 4 (VAT on Purchases), Box 7 (Value of Purchases) and Box 1 (VAT on Sales) on the VAT Return.

After the VAT codes have been created, they become available in the Purchase Ledger, Purchase Order Processing and Importer modules.

  1. Open the System folder and click VAT Processing or click the Administration tab on the Ribbon Bar and then click System - VAT Processing. Select VAT Codes.

  2. Select the icon on the toolbar or press CTRL+N.

  3. In the Country Type box, select 'H' for Home country.

  4. In the Trans. Type box, select 'R' for 'Reverse Charge Purchase'.

  5. In the VAT Code box, enter a number or letter to identify the code. This must be a code that is not already used.

  6. Enter the VAT rate and date, and enter the Nominal Account to which the VAT will be posted in the Nominal Ledger.

  1. Select the icon on the toolbar or press CTRL+S.