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.
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.
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.
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.