Vat codes needed for postponed accounting for vat

Introduction

Postponed accounting for VAT does not apply to Sales Invoices, it is required only for the recording of supplier invoices Your bookkeeping software should be able to deal with new vat codes or vat rates. If you can’t find where you add or edit vat codes, contact the software support help desk.

First, let us deal with only one vat rate, the standard rate of VAT of 23% (as of the year 2023) If we buy these items locally in Ireland, the supplier will invoice us for the goods or services and add a 23% vat charge to the invoice. We also have to decide if the items are for resale or not for resale

Items for resale need to be separated from items not for resale. Important: The duty paid must be recorded in the same vat code as used for the good or service that postponed accounting for vat was recorded with.

VAT code example

Domestic/Home country (Ireland)

Vat Code	R/N	% charge
RS1	R	23%
NR1	N	23%

EU Imports

Vat Code	R/N	% charge	imputed
RS2	R	0%	23%
NR2	N	0%	23%

No VAT paid out, but the vat that would have been charged if the goods were bought in Ireland must be calculated and included in both T1 vat on Sales value T2 vat on Purchases The net effect is a zero value But you must not leave out the imputed vat values (the amount you would have been charged for had you bought the goods in Ireland)

Non EU Imports – VAT paid at point of Entry

Vat Code	R/N	% charge	imputed
RS3	R	0%	23%
NR3	N	0%	23%

You will have paid out VAT and Duty to the Customs and Excise division of the Revenue Commissioners when the goods were imported.

Non EU Imports – Postponed Accounting for VAT

Vat Code	R/N	% charge	imputed
RS3	R	0%	23%
NR3	N	0%	23%

You will not have paid over the VAT due on the goods when they were imported, but you will have paid over the duty amount, if any was due to be paid.

Other VAT codes

We have created 8 vat codes for the different variations in how 23% vat is charged.

This will need to be repeated for each vat rate you use when importing items from outside the EU 23% standard rate (most used) 13.5% reduced rate 0%

For just these 3 most common vat rates, you need in total 24 vat codes

Why are all these vat rates needed?

The VAT 3 return form requires in box PA1 the net amount for postponed for vat transactions The RTD form requires the postponed accounting Boxes P2, P3 and P4

To make it easy to complete the returns and not have to redo all your vat reports using a spreadsheet, analyse the vat correctly and in full as you enter your supplier invoices.

VAT 3 Return requirements

Return of Trading Details (RTD) requirements

Section 2 Section 3 Section 4