Reverse charge VAT entry

[cruiser]

In Ireland when a sub-contractor who is registered for VAT issues an invoice for services to the principal contractor who is also VAT registered the VAT reverse charge system comes into play.
I know that Sage 2009 and onwards has the facility to account for this procedure however, can anybody please tell me what the manual procedure would be if you don't have these versions?
I did think that making a Tax code of T10 into Sub-contractors VAT would suffice and then just add this figure to the T1 box and subtract it from the T2 but if I then enter the Sub-contractors NET invoice and allocate T10 at 13.5% this will then leave the VAT outstanding to him when he has been paid the net amount.
Any advice would help here rather than having to pay out hundreds for a new version of Sage 50.

[bandonsage]

Set up a new VAT code to represent VAT at 13.5%
Make the rate 0 but type in the description 13.5% reverse charge VAT

Assuming an invoice arrives for € 100.00 from a sub-contractor.
Enter the invoice as normal using the batch supplier invoice screen.
Use the new VAT code for reverse charge VAT that you have set up.
This will post an invoice for €100.00 against the sub-contractor at zero VAT.

Now go to your Nominal Ledger and click on Journals.

Enter the following journal to reflect the reverse charge VAT at 13.5% on €100.00 .
The reverse charge VAT is € 13.50 .
2200 Sales tax Control Account Credit 13.50
2201 Purchase Tax Control Account Debit 13.50

The Trial balance will now read as such :

N/C Name DR CR
2100 Creditors Control A/C 100.00
2200 Sales Tax Control A/C 13.50
2201 Purchase Tax Control A/C 13.50
5000 Materials Purchased 100.00

Totals 113.50 113.50

[cruiser]

Many thanks for the explanation this makes sense and I am now using it. This has saved me a packet not having to update to a new version. Thanks again.