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A new way to enter your EC Acquisitions and Reverse Charges

You’ve probably already seen some of the new functionality that we announced in our 23rd June update to Xero. There were a lot of great new features in this release, and one we really want to highlight is the way you can now enter EC Acquisitions and Reverse Charges from inside Xero. When you’re purchasing goods and/or services from EU Member States, the UK’s HM Revenue & Customs (HMRC) requires you to declare this information in certain boxes on the VAT return. Which box this information goes into depends on the type of transaction. In terms of Reverse Charges, there are occasions when purchasing items from the EU where the VAT has to be declared (paid), but then ‘reversed out’ (refunded) directly at the same time.

Now, providing you use one of the three new tax rates that we’ve set up, Xero takes care of all of this for you. Xero automatically reverses the purchased items out – and that’s quite a time-saver if you’ve been doing this manually up to now. The three tax rates that have been set up are:

  • EC Acquisitions (20%)
  • EC Acquisitions (Zero Rated)
  • Reverse Charges (20%)

Watch our how-to video

We’ve put together a short how-to video that runs you through the process and shows you where the items will appear in your VAT report. Take a look and see how easy it is to deal with Reverse Charges in Xero.

 

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3 comments

Gurpreet Sandhu
29 July 2014 #

Cheers Xero – will make life a lot easier! Great feature!

Sergiy Kyrylkov
29 July 2014 #

Quite amazed it wasn’t there already.

What about multiple VAT registrations now?

Amy Kear
30 August 2014 #

When using this feature do you need to assign it to a reverse charge account or can you assign to your other accounts?

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