Last month I needed to complete my quarterly UK VAT return and had hoped to use the ‘VAT Return (UK)’ summary report. I realised this isn’t configured correctly when dealing with purchases and sales to the EU, and have seen some other forum topics referring to the crowdsource site to help construct country-specific summary reports.
I have been setting one up for the UK so that EU VAT is correctly accounted for, but have a two requests related to the UK built-in VAT codes (which this form refers to).
Firstly, there is a terminology issue - the UK HMRC refers to purchases and sales within the EU as Acquisitions and Disposals respectively. It would make sense to have the VAT codes use the same terminology, as Imports relates to purchases from outside the EU. Please could we update the two VAT codes as follows:
‘United Kingdom - VAT 20% on Imports’, should be ‘United Kingdom - VAT 20% on Acquisitions/Disposals’
‘United Kingdom - VAT 5% on Imports’, should be ‘United Kingdom - VAT 5% on Acquisitions/Disposals’
Secondly, we need to account for all EU acquisitions/disposals even those that are zero rated or exempt. Please could we have an additional built-in VAT code (at 0%) : ‘United Kingdom - VAT Exempt on Acquisitions/Disposals’
Finally, perhaps someone with greater accounting knowledge than me could clarify the difference between zero-rated and tax exempt for VAT purposes. I have presumed the terms are synonymous.