Xero - beautiful accounting software

Xero Business Help Center

Xero Business Community

Community > Small Business >

How to reconcile a VAT and Duty transaction

Started by Thomas Lea -   in Small Business

I have a transaction in xero that needs reconciling, it is a payment made by direct debit for excise duty on imports released from bond and also the VAT owing which is 20% of the cost value of the items + their duty. Im am not sure how best to reconcile these transactions. For the duty I think I can split it off and record it as a cost of goods sold, but if I put it as 20% VAT this still leaves the VAT on the cost item of the goods and Im not sure how to record this so that it goes into the vat report.

I hope this makes some sort of sense, please let me know if I can make it clearer.

Any help very gratefully received
As you say create a CGS item for the duty and then with the VAT
you are paying post it to 820/ VAT and then under tax code
you get a VAT on Imports option so choose that. This puts the
transaction straight into the VAT return as input VAT ready to claim back.

Think this was what you were meaning.

Sue Palmer  

Thanks Sue, so simple. One small question, i'm guessing that the vat rate for the duty payment would be No VAT rather than, exempt or zero rated, is that correct

Thomas Lea