Is anyone else seeing non‑UK digital services (e.g., the September Google Ads invoice from Ireland) being posted to Box 6 rather than Box 7, with the reverse charge put through Box 1 but no corresponding recovery in Box 4? I’m implementing a pre‑submission control to reconcile Box 1 to the reverse charge journal and require Box 4 parity where input tax is recoverable, with a 1% variance cap before MTD sign‑off?
Likely the entry used a reverse‑charge sales code, so it’s posting net to Box 6 and VAT to Box 1 only; for “non‑UK digital services” the purchase RC code should push the net to both 6 and 7 and, if recoverable, VAT to Box 4 too (per HMRC 700/12: https://www.gov.uk/guidance/vat-notice-70012-how-to-fill-in-and-submit-your-vat-return). As a quick fix, map a dedicated “RC services from abroad (purchases)” tax code and test one Google Ads bill so your pre‑submission check sees Box 1=Box 4 when fully recoverable — otherwise it’s the hokey‑cokey. Which software are you on, and is partial exemption stopping Box 4?
Seen this when the expense account’s default tax rate overrides the bill line — uses the sales RC/no‑reclaim variant, pushes the net to Box 6 and skips Box 4 (assuming you’re not partial exempt); set the account or supplier default to the purchase RC code that posts to purchases and allows recovery and your Box 1=Box 4 check will pass. @maxT23 Which software are you on?
Quick check: are you on the Flat Rate Scheme or partial exemption? Those suppress Box 4 on RC and, if the supplier isn’t flagged as “overseas services – RC,” some systems also push the net to Box 6; flip the supplier tax treatment and your Box 1/4 parity should hold — otherwise Box 4 gets left outside like a grumpy bouncer.
Likely because you booked the Google bill as No VAT and then added a manual reverse‑charge journal — those usually hit Box 1 but don’t feed Box 4 or your purchases total. Re‑enter the “September Google Ads invoice from Ireland” using the reclaimable purchase reverse‑charge code on the bill line and remove the journal; your sales total won’t be inflated and Box 1/4 will tie. What software are you on?
Seen this when the RC sales code gets used on an expense — the system treats it like a self‑supply, pushes the net into Box 6 and skips the input, . Re‑post the September Google Ads with the “RC purchases/expenses” tax code so it feeds output + input VAT and Box 7; HMRC’s box mapping is here: How to fill in and submit your VAT Return (VAT Notice 700/12) - GOV.UK. If that doesn’t fix it, what software are you on?
Quick example: if that invoice hit a sales nominal, most systems push the net to Box 6 and don’t create the RC input — recode to an expense mapped to EU services (purchases) and it’ll land in Box 7 with Box 4 parity; building on @laraG_99, check account mapping not just the tax code. Which software?
I fixed this by setting Google Ireland as a supplier with a default tax code for “reverse charge on expenses,” so every bill lands in purchases and the matching input is created automatically, plus a bank rule to stop “No VAT” sneaking in; HMRC ref: Place of supply of services (VAT Notice 741A) - GOV.UK. If you’re partially exempt you won’t want full recovery, but otherwise this keeps the RC outputs aligned — what system are you on so we can point to the exact code?