Reports customised 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 beside them to indicate that it is an amount that is not actually payable.
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. After all, you don’t have to pay these amounts - only account for them when reporting VAT to Customs & Excise.
Use this report if you use the accrual method of VAT accounting. This method works by paying or reclaiming VAT based on the invoice date.
