New Tax Code Not Showing Up on VAT Worksheet

Hi, I created a 100% VAT tax code to process import VAT invoices received from the carrier, (I;m based in the UK importing from USA) although it shows up in ‘Tax Payable’ it doesn’t show up on the VAT Calculation Worksheet which it needs to so that I can reclaim that VAT.
I’d appreciate if you could help me with this. Is there a setting I’m missing?

Setting a 100% VAT tax code is not the correct approach so delete this tax code

To take up the import VAT you need to add an extra line onto the invoice where the VAT is being charged. Lets say your Supplier’s Purchase Invoice is for 10,000 which you have taken up as VAT Free.

Therefore on the Carriers Purchase Invoice you in effect reverse that Suppliers Purchase Invoice total and take it up again using the appropriate tax code.

I used a clearing account but you can use any account as the 10,000’s contra out
If the VAT values doesn’t exactly match the Suppliers invoice total then use a contra value (say 9,900) which will give you the correct VAT value charged.

Thanks Brucanna

Thanks for your reply. I was following Manager’s suggested use of 100% here

I’m sorry, I don’t fully understand your method. Surely there must be a simpler way of doing this?

Also none of the other tax codes show up on my VAT calculation worksheet, how do I then populate the EC member states boxes?

My understanding is this - that only the in-built tax codes (not custom tax codes) will appear on the tax worksheets due to the fact that when you are creating those custom tax codes there is no option (box) where you can nominate a tax worksheet location / position.

Therefore, for the tax worksheet to be fully functional you can only use the in-built tax codes. The guide should have a “warning” under Custom Codes to that effect.

Therefore the above example is how to handle VAT by using the in-built codes - read these topics.
(NOTE - reference to an import tax code applies to Australia only)

This is correct, because posting of tax amounts is hard-coded. Think of things this way: With in-built tax codes, Manager knows where to look and what to look for. With custom codes, users can do all sorts of things that Manager could not predict.

To be clear, there is not now and never has been a Guide or any detailed documentation for either of the two tax calculation worksheets:

  • GST Calculation Worksheet for BAS (Australia)
  • VAT Calculation Worksheet (United Kingdom)

In fact, we technically only know which countries these apply to based on forum comments around the time of their introductions. There has never been complete information on what they include, how they are calculated, etc. On a completely unscientific basis, there seem to be more complaints and questions about the VAT worksheet than the BAS one. It also contains some typographical errors.

I was referring to the “Create Tax Codes” guide where it details under the “Custom tax code” heading.

The warning could be something like - You shouldn’t create custom tax codes if you intend to use one of the Tax Calculation Worksheets (Australia, United Kingdom), only in-built tax codes can be used in conjunction with those worksheets.

A warning has been added. Thank you for the suggestion.

Hi Tut,
Thanks for your input. This particular invoice is for VAT so it is 100% VAT and is paid to the carrier, not the supplier. As I have a lot of these, I was hoping for a simpler way of inputting this so that is shows up on the VAT worksheet.

Yes the amount is 100% VAT, but what is the related VAT rate to create that amount - 5%, 20% or ?.

The simple ways are:
1 - Replace the Carriers VAT charge on the invoice with the two line example detailed above, or
2 - Use one of the UK in-built tax codes for imports
0000000 Bug 2