Reporting EC purchases

The VAT Summary, VAT Summary – Cash, VAT Detail and VAT Detail – Cash reports show the VAT on transactions, grouped together by VAT code. Reports filtered to include an EC Purchase VAT code will show the amount of VAT that you would have paid had you purchased in the UK calculated using the EC Reported Rate percentage that you entered when creating the VAT code.

These notional amounts will appear on the report with an asterisk next to them to indicate that they are not actually payable.

The example VAT Detail report below is made up of two transactions:

Transaction 1: A purchase of £100 from Fred's Ginger Supplies, a UK supplier. The transaction used the Non-EC VAT code S, rated at 17.5 per cent.

Transaction 2: A purchase of £200 from Bonjour Fournisseur, an EC Supplier. The transaction used the EC Purchase VAT code ECP.


A	Transaction 1	The purchase is made using the EC Purchase VAT code ECP. This code was created with an EC Reported Rate of 17.5 per cent. The VAT amounts for this transaction are notional VAT amounts, that is, they only exist for the VAT report, and are calculated at the EC Reported Rate for this VAT code.
B	Transaction 2	The purchase is made using a non-EC VAT code S, rated at 17.5 per cent. Note the Total and Less EC Purchase VAT lines have the same amounts. This is because the S VAT code was defined as non-EC, therefore, there are no EC Purchase VAT amounts affecting this total.

Note that VAT on the second purchase in the above example appears in the VAT Collected and VAT Paid columns. The two notional amounts of £35 should cancel each other out on the VAT 100 form.

The Less EC Purchase VAT line below each VAT code's total subtracts all of the notional entries created by EC purchases from the totals, leaving you with the amounts you are actually due to pay. You don't have to pay these amounts, only account for them when reporting VAT to HM Revenue & Customs.