Tips

Sage 50cloud Accounts

E-commerce VAT in the EU has changed from 1st July 2021

The way VAT is handled for online sales from business worldwide to consumers B2C in the European Union (EU) changed on 1st July 2021, instead of registering and paying VAT in each country you sell to, you can choose to report and pay all EU VAT through a single return using.

  • One Stop Shop (OSS)
  • Import One Stop Shop (IOSS)

With Sage 50cloud Accounts v27.2 and above, you can enable OSS/IOSS to help you deal with sales to consumers in EU under the One Stop Shop and the Import One Stop Shop.

  1. Make sure you have Sage 50cloud V27.2 or above loaded.
  2. Click Tools then click Activation then click Enable OSS/IOSS reporting.
  3. Click Next and select the nominal codes to use for the VAT liability control accounts for each scheme.

Scheme                        Nominal Code  Description     

Union OSS                    2205                             Union OSS Tax Control Account

Non-union OSS             2206                             Non-union OSS Tax Control Account

IOSS                            2207                             IOSS Tax Control Account

By default, nominal codes 2205-2207 are used, if these codes are already in use, three other codes within Current Liabilities will be used.

  1. Click Next then click Finish.

Setting up tax codes to use with OSS/IOSS reporting

 When using OSS/IOSS reporting, to make it easier to process transactions and give you flexibility when you run reports, it is recommended setting up separate tax codes for each different tax rate within each country.

Example – Germany has three rates, Zero, Reduced and Standard, for both goods and services, you would set up 6 different tax codes for use with just Germany.

  1. Click Settings then click Configuration and click Tax Codes.
  2. Select the required Code and click Edit.

Tip: you can use any free code you are not already using; however, it is recommended using a range that has a number of free tax codes together.

  1. Enter the following details:

Enable Import/Export Code                 Select this checkbox.

OSS/OISS codes                                  Select this checkbox.

Goods/Service drop-down                   Select whether the tax code is for goods or Services.

Rate                                                     Enter the rate for this tax code.

Description                                          Enter a description to help identify this tax code

  1. Click OK, then click OK.

Processing OSS/IOSS transactions

 Using Batch Invoices or Batch Credit Notes

  1. Click Customers then click Batch invoice or Batch credit.
  2. Create the batch invoice or credit as usual, however, when you select the tax code, choose one of the OSS/IOSS tax codes you have previously set up.

Note: do not use the same tax code for both goods and services.  This is because they affect your VAT return differently.

  1. With OSS/IOSS transactions, there are two new options you need to select:
  • Country of VAT – the country you are shipping to.
  • Report type – select one of the following

Union OSS – only if you are in Northern Ireland

Non-Union OSS – use this when supplying services to an EU consumer from a supplier outside the EU.

IOSS  – Use this when distance selling goods up to the value of €150 to an EU consumer, from a supplier outside the EU.

  1. Click Save then click Close.

Using Invoices and credits and sales orders

  1. Create a new invoice, credit or sales order as usual:
  • Product and services invoice – Click Invoices and credits then click New invoice.
  • Product and services credit – Click Invoices and credits then click New credit.
  • Sales order – Click Sales orders then click New.
  1. When entering your tax codes, choose one of the OSS/IOSS tax codes you previously set up.

Note: do not use the same tax code for both goods and services.  This is because they affect your VAT return differently.

  1. Click the Order tab and select the Apply OSS/IOSS reporting check-box.
  2. Click Country of VAT and select the country the product is shipped to.
  3. Click Report type and select one of the following:

Union OSS – only if you are in Northern Ireland

Non-Union OSS – use this when supplying services to an EU consumer         from a supplier outside the EU.

IOSS – Use this when distance selling goods up to the value of €150 to an EU consumer, from a supplier outside the EU.

  1. Click Save then click Close

If you would like help setting up new tax codes or training on how to enter the new information required, or need any other help, please contact us

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We are able to visit your premises (after receiving a copy of your COVID 19 risk assessment/procedures) and we also have the ability to remotely login to your system from our offices to provide any accounts, VAT or payroll support you need.

The latest Government advice can be found at https://www.gov.uk/coronavirus/business-support

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