Hello and welcome. Thank you for using Just Answer.
I appreciate that you have detailed your question and therefore, it is easier to understand. Let me come to the point.
To begin with, you are correct to assume that you should use the £GBP figure debited from your bank account as the conversion figure for the $USD invoice. This will be more accurate.
Having said this, it would be posted as under.
Purchase A/c DR
To Bank Account.
(You will post this transaction twice, one for 30% and the another for 70%)
Regarding what VAT code to use, kindly refer the below table. Note that Sage Line 50 sets the standard UK and EC VAT Rates automatically for you, so this section assumes you have not altered your VAT codes.
Secondly, note that you have properly / correctly calculated the following.
- One for freight (£700), shipping insurance (£30) and duty deferment fee (£20), all showing zero VAT.
- One showing the duty and VAT. The duty at 12% with zero VAT and the import VAT which also says zero VAT. I work out the duty to be £10,000 x 12% = £1,200. The VAT is (£10,000 + £1,200 + £700 + £30 + £20) x 20% = £2,390
For VAT Code, which Sage sets automatically, refer.
You will post it as under.
Purchase A/c Dr 10,000
Freight A/c DR 700
Shipping Insurance A/c DR 30
Duty deferment Fee A/c DR 20
VAT A/cDR 2390
TO Bank A/c 13140
It is correct that HMRC uses the total of the value of the goods PLUS shipping/freight costs, shipping insurance, duty and deferment fee to work out the Import VAT.
Further to this, note that to C79 is mandatory before you can reclaim the VAT. It would be reclaimed only after your invoice numbers tally with those of C79.
YES, you will have to post C79 in Sage. Rather than explaining here and make it complecated, I point you to the following link. It is very nicely explained in very lucid manner.
I am sure this would help.
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