With Brexit a lot of customers are trying to deal with VAT only Purchase Invoices for the first time. This is where Turbo Inventory comes to help. This post goes over how easy it is to record a VAT only purchase invoice and in Turbo Inventory:
VAT only purchase invoices typically come from freight shippers or Customs and relate to the VAT for goods previously imported. They usually relate to goods imported from outside the EU. Typically an invoice with no VAT will have already been received from the supplier.
The best approach to entering VAT-only purchase invoices is to think of them in conjunction with the original purchase invoice from the supplier, and is best understood by example. In this case, an invoice has already been received without a VAT element, for €10,000, with the VAT been recorded as Foreign – Non-EU and a rate of 0%.
For the VAT only purchase invoice which follows, the amount of VAT that would have been paid would have to be calculated manually; in this case it would be €2,300 at 23%.
The VAT only purchase invoice works simply by entering a Customs (or freight line) for the original invoice amount of €10,000 at the 23% VAT rate. Then adding another line, in the exact same way as the first line, but for a negative €10,000 and at 0% VAT. This then leaves the invoice with just the €2,300 VAT shown. The following illustration demonstrates how the entry is made: