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Dear tutor,
Can you please enlight me on the reason why we have to distinguish between zero and exempt VAT tax rate when an accountant is booking a purchase invoice (invoice for input)?
As they both have no amount of tax, why it is important to enter the correct tax code when an accountant books an input invoice?
Thank you in advance!
Although neither purchase involves VAT being charged, they are treated differently within the calculation for the VAT return. It’s mainly a record keeping issue to comply with HMRC requirements.
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