Manual entry of Purchase VAT

We are a UK based importer of goods from outside the EU. Our Suppliers invoice us for the Cost of Goods and the international freight without VAT - as they should do. Recording Supplier invoices without VAT is no problem!!

Import VAT & duty is invoiced to us by the carrier – DHL/UPS/etc. Typically, an invoice could show import duty at, say, £100, and the import VAT could be over £1000.

Can anybody tell me how I record VAT manually on a Purchase Invoice, so that I can input £100 as the item value and £1000 in the VAT column.

Many thanks

Check the latest version (15.1.42). Two new in-built tax codes have been added for UK:

  • VAT 5% on imports
  • VAT 20% on imports

See how to add them: Guides | Manager

When paying VAT on import, simply use one of these new tax codes.

Hi Lubos

Thanks for your reply. However, I don’t think that’s going to work!! Let me explain in more detail.

My supplier A is in China and I buy from them $5000 worth of goods. I purchase $5000 from my
foreign exchange company and they transfer the funds to supplier A.

I enter the invoice from supplier A onto the accounts in £ - being the value of my foreign exchange transaction – let’s say that it’s £4000. This invoice has no VAT.

Subsequently, I receive an invoice from, say, DHL, for the cost of the import duty and import VAT.

The import duty will, on an order of this $ value, be approximately £167 and the import VAT will be approx. £675.

I would enter this invoice in favour of the carrier – DHL.

To achieve this, I believe I need to be able to enter the VAT manually.

This is something I can do currently on SAGE Line 50, but I want to move to your product as it is much simpler for my accounts assistant and it seems to be a great product!!

I hope this explanation helps you better understand my need.

Can you tell me how I achieve this please.

I understand what you mean. Have you tried using those two new tax codes? It is essentially a way to enter VAT amount manually. And it won’t mess up VAT return because if you pay 1,000 marked as “VAT 20% on imports”, Manager will also increase your purchases by 5,000 on VAT return so everything looks orderly.

Orderly? I must be doing something wrong! Look at what happens when I create a PO for DHL VAT…

I find that import VAT very rarely seems to work out as 20% of my original cost of goods.

When I get the a bill from DHL I work out what the amount the VAT has been derived from, and create a line showing a reversal of a previous VAT free payment based on this figure, followed by a line showing adding back of payment with VAT of same amount. I add the lines for duty and admin charges exactly as DHL have charged and, hey presto, my books balance and the VAT I account for is exactly what was charged to me by DHL. See example below.

It’s a bit of a laborious task but it seems to work. I’ve found dealing with imports is the hardest thing I ever account for.

Hi Rob

It is indeed a laborious task!!

What we need is to be able to manually type in a VAT amount.

It’s not just the VAT return, but also the impact it has on P&L.

Maybe Lubos can add coding to enable the manual input of VAT that therefore has no link to a product entry, but records the PI entry correctly.