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When adding a sales or purchase invoice you in Bookkeeping you will have to select a VAT rate.

You will notice the VAT Rates are given in short form.

Please see this table to help you understand the different VAT Codes for sales and purchases

EU VAT codes

Sales to EU Member States

From the 1st January 2021, the end of the transition period, there is a customs border now between the EU and the UK. This is with the exception of Northern Ireland.

Moving goods between the UK and the EU is now considered importing and exporting. 

Please refer to the below table for the new VAT codes which should be used.

Exports of goods to EU countries should be zero-rated for UK VAT. This will apply regardless of whether exporting goods to a consumer (B2C), or to a business (B2B). No VAT is payable, but you do have to include the exports as part of the VAT return.

The supply of services to customers in the EU is treated the same as those to any customer outside the EU from the 1st January 2021.

For a business in the UK that is not registered for VAT, the value of reverse charge supplies must be added to the business taxable supplies to determine whether the company should be registered for VAT. Therefore, standard rate should be used.

For Business-to-Business services, the service is deemed to be provided where the customer is resident.  This is outside the scope of UK VAT and zero-rated.  

Purchases from EU Member States

You can reclaim the VAT incurred on the imported goods bought as input tax subject to the normal rules. Therefore, standard or zero rated can be used.

Buying services from non VAT registered businesses is outside the scope of UK VAT. This will appear in total purchases in your VAT return.

Buying services from VAT registered businesses, VAT should be accounted for. This can be done by using reverse charge VAT rate.