Reverse charge VAT is required on sales and purchases of mobile telephones, computer chips, microprocessors, or central processing units for business purposes within the United Kingdom. Under reverse charge VAT rules, the buyer of the goods, instead of the seller, is liable to account for the VAT on the sale.
The seller does not charge VAT, but both the items that are subject to reverse charge VAT and the total amount of reverse charge VAT are noted on the invoice. These items also are identified on VAT 100 reports as being subject to reverse charge. You can use the report to view information about reverse charge sales on a periodic basis. Depending on how your system is set up, this information can be calculated automatically for purchase order invoices.
Create a purchase order
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Select a vendor account.
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Enter line items.
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Click > .
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In the form, you can view the sales tax amounts for each sales tax code. If necessary, you can adjust the sales tax amount for the sales tax code that represents reverse charge VAT.
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Close the form.
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Press CTRL+S to save the purchase order. If reverse charge VAT applies, it is automatically calculated.
Enter an invoice
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Select a purchase order and click > .
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Click .
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In the form, you can view the sales tax amounts for each sales tax code. If necessary, adjust the sales tax amount for the sales tax code that represents reverse charge VAT to match the amount shown on the invoice that you received from your vendor.
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Close the form.
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In the form, verify that the other invoice information is correct and post the invoice.