How do I edit VAT rates?

Summary

This article explains how to change the rates of V.A.T. in Platinum.

Details

Go to "Systems" -> "Reports & Parameters" -> "Maintenance Options" -> "System Administrator" -> "V.A.T. Parameters".

PLEASE NOTE: If you do not have a "Systems" option go directly to the "Reports & Parameters" option or refer to a person with higher access rights

There are 4 rates of V.A.T. that can be used. They change only with government legislation.

Changing V.A.T. Rates

The following parameters can be amended:

• "V.A.T. Returns Frequency : (Quarterly/Monthly/Bi-monthly)"
• "V.A.T. Rates :"
  • Here you can update the V.A.T. rate percentages and descriptions.

Example: To alter the tax rate of V.A.T. rate 1 move to the "V.A.T. Rates :" prompt and change the rate from 15% to 17.50%. This will increase the rate of V.A.T. by 2.5%

Other Considerations

• If you have a custom Report Generator report (i.e. one that had been written for your needs) that calculates the V.A.T. manually, this report may need to be amended to reflect the new rate. The above WILL not update the report. Please call our software support for further help.

• If you have more than one company on your system (i.e. if there is more than one icon in the Platinum folder or on the Desktop to get you in to LIVE - e.g. not a test/training system) the above changes will have to be done for each company.

• If you use regular journals, you will need to recalculate V.A.T. amounts on any V.A.T. relevant nominal centres.

January 2010 Changes

DO NOT APPLY ANY CHANGES TO YOUR SYSTEM UNTIL START OF BUSINESS ON 1ST JANUARY 2010. You must finish all your sales invoicing for December BEFORE you change the V.A.T. rates, and you MUST NOT raise any sales invoices for January until you have changed the V.A.T. rates. Manually entered purchase invoices are not affected, but motorcycle, caravan and car dealers must be very careful about VAT qualifying or commercial part exchanges or purchases to ensure that they get the correct rate of V.A.T..

United Kingdom Changes

IMPORTANT INFORMATION: (Announced 24th November 2008) The UK Government has announced that the V.A.T. rate will be changing from 1st January 2010 from 15% to 17.5%. For more information visit the official page on the government website by clicking here and here. Keep a close eye on these pages and on the news media in general just in case the increase is postponed or revised in some way.

SALES:  Because of this announcement, you must change your main V.A.T. Rate either at close of business on 31st December, or BEFORE you invoice anything in January. This will ensure that the goods that you sell have the correct amount of V.A.T. charged. Most of you will have your sale or retail prices stored excluding any V.A.T., so when you sell items on the system, they will be more expensive than the price on the label (if you have prices on labels).

PURCHASES:  Remember that you will still be receiving and entering purchase invoices and receipts dated December after January 1st, that will have V.A.T. at 15% - these should be entered in the main rate, which will display 17.5% after the change above, and the V.A.T. element MUST be entered manually so that it agrees with the invoice that you have received. The system will warn you that the VAT amount you are posting is outside its permitted limits - check that you have entered the figure that is on the invoice or that you intended, and then click [Continue]. With any January invoices, you can use the calculation buttons again.

CREDITS:  Credit Notes issued from 1st January, for goods that were purchased before 1st January, must be credited at the rate of V.A.T. that they were originally invoiced, i.e. 15%. To handle this procedure the V.A.T. rate must be temporarily changed back to 15% while the credit is raised. This can be achieved by using the Change V.A.T. Rate drop-down menu option and can be activated with the keyboard short-cut <Alt+V>. For more information see the How do I Credit Items Sold at a Previous VAT Rate? article.

Republic Of Ireland Changes

Currently we are not aware of any changes to V.A.T. rates in the Republic, but, as for our UK customers, please check the Revenue website and your news media regularly in case any changes are proposed or imposed.

See also

• How do I Credit Items Sold at a Previous VAT Rate?

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Keywords AND Misspellings

VAT, V.A.T., rate, rates, Value added tax, changing VAT