The way in which VAT returns have been worded has changed, this was implemented as of the tax year 2021/22.
The wording will not impact your VAT return or the way you should report. It’s been introduced to measure clarity to the recent changes due to Brexit.
If you are using Sage 50 in order to prepare your VAT returns then the changes may not even be noticeable. However, it is still important to be aware of the changes and why they have been enforced.
If you file your VAT using the HMRC portal you will notice the changes when you submit your VAT return.
There are other changes which you should be aware of if you are voluntarily registered for VAT.
When were these changes implemented?
These changes were implemented from 8th April 2021. The reason for this was to ensure that VAT returns were only affected during a full VAT year following the brexit transition.
Why have the changes been put in place?
The changes have been made due to the impact of Brexit to ensure that VAT returns are consistent and less complex.
What has changed?
Boxes 2, 4, 8 and 9 have been amended. The labels and the accompanying notes have changed. Boxes 1, 3, 5, 6 and 7 have not been affected.
|1||The label wording for box 1 on the VAT return has not been affected. The notes provided by HMRC say, “Include the VAT due on all goods and services you supplied in the period covered by the return. This does not include exports or dispatches as these are zero rated. Include the VAT due in this period on imports accounted for through postponed VAT accounting.”|
|2||Box 2 has been changed, it previously said, “VAT due in this period on acquisitions from other EC Member States”, it now says, “VAT due in the period on acquisitions of goods made in Northern Ireland from EU Member States”.|
|4||Box 4 – Previously said, “VAT reclaimed in the period on purchases and other inputs (including acquisitions from the EU)” it now says, “VAT reclaimed in the period on purchases and other inputs (including acquisitions in Northern Ireland from EU member states)”. The notes that HMRC have made are as follows, “Show the total amount of deductible VAT charged on your business purchases. This is referred to as your ‘input VAT’ for the period. Include the VAT reclaimed in this period on imports accounted for through postponed VAT accounting”.|
|8||Box 8 has been amended, the old labelling was, “Total value of all supplies of goods and related costs, excluding any VAT, to other EC Member States.” The new labelling is, Total value of dispatches of goods and related costs (excluding VAT) from Northern Ireland to EU Member States.”|
HMRC have noted, “In box 8 show the total value of all supplies of goods and related costs, excluding any VAT, to EU Member States from Northern Ireland.”
|9||In box 9 the old wording was, “Total value of all acquisitions of goods and related costs, excluding any VAT, from other EC Member States.”|
It now says, “Total value of acquisitions of goods and related costs (excluding VAT) made in Northern Ireland from EU Member States.”
The notes from HMRC says, “In box 9 show the total value of all acquisitions of goods and related costs, excluding any VAT, from EU Member States to Northern Ireland.”
Of course Brexit has impacted us in more ways than we ever expected and of course it takes time to adjust, it was inevitable that VAT returns would be affected.
If you’d already made adjustments to your VAT processes due to Brexit then this will not be significant to you.
Your Sage software will automatically adjust and fill in values when you come to submit your VAT return.
You may find this guide useful when submitting your VAT return.
“Any advice relating to accounts or tax should be sought from your tax accountant. Sage Accounts Solutions Limited will not be held responsible for any loss or damage caused as a result of the information contained herein.”