Domestic Reverse Charge Goods VAT

In the United Kingdom, specified categories of goods being traded between businesses are subject to a VAT accounting provision called the domestic reverse charge, which is applicable above a certain sale amount. The reverse charge only applies to sales within the United Kingdom where specified goods are purchased by a VAT-registered business for business purposes – sales to non-business customers are unaffected by the change and normal VAT rules continue to apply. For additional information about VAT domestic reverse charges see the PeopleSoft Global Options and Reports documentation.

To identify a transactions that includes a domestic reverse charge, PeopleSoft Receivables includes fields to record domestic reverse charges, including:

Term Definition

Domestic Reverse Charge Goods

Select this check box if the country requires the use of the domestic reverse charge provision.

Customer VAT Code

Enter the customer VAT code used to calculate a domestic reverse charge VAT amount. When the Domestic Reverse Charge Goods check box has been selected, the regular VAT code is replaced by a zero-rate VAT code and the customer VAT code is used instead.

Customer VAT Rate

Displays the rate from the customer VAT code.

Customer Amount

Displays the customer VAT amount for domestic reverse charges that are calculated using the Customer VAT Code.

Treatment

For the sale of goods when the domestic reverse charge provision is required enter the value of Domestic Reverse Charge Sale in the Treatment field.

The following pages and components within PeopleSoft Receivables contain fields to record domestic reverse charges:

  • The Receivables Options - VAT Defaults page defines the default values for VAT processing. Click the VAT Default link to access the VAT Defaults Setup page. This page includes the Domestic Reverse Charge field (enter a yes or no value to indicate the use of the domestic reverse charge provision) and the Domestic Reverse Charge Sales field to enter a VAT Transaction Type code for domestic reverse charges.

    See Receivables Options - VAT Defaults Page.

  • Pending Item components. Several domestic reverse charges fields are located within the Pending Items components on the VAT Summary Information page and the VAT Lines page.

    See Understanding Pending Item Components.

  • The VAT Detail page located within the Payment Worksheet component.

    See Applying Payments Using Payment Worksheets.

  • The Item VAT Entries page within the View/Update Item Details component contains the Domestic Reverse Charge Goods check box, the Customer VAT Code field, the Customer VAT Rate field, and the Customer Amount field.

    See Item VAT Entries Page.

  • The VAT Detail page located within the Draft Worksheet component.

    See Using Worksheets to Approve or Reject Drafts.

  • The Correct Posting Errors components for online items, external items, and payments.

    See Correcting Posting Errors.