How do I edit VAT rates?

DO NOT APPLY ANY CHANGES TO YOUR SYSTEM UNTIL START OF BUSINESS ON 1ST JANUARY 2010.

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 after Monday 4th January 2010.

• 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 INVOICES:  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).

SALES CREDIT NOTES:  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 done by going back to a menu, clicking on "Options" at the top of the screen and then clicking Change V.A.T. Rate. This can also 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.

PURCHASE INVOICES AND CREDIT NOTES:  Remember that you will still be receiving and entering purchase invoices and credit notes dated December after January 1st, and these will have V.A.T. at 15%. We would advise you to post December (or prior) invoices in one batch, and January or later invoices in another batch. By doing this, you can change the V.A.T. rate temporarily as detailed in the SALES CREDIT NOTES section above, post your December items, and then exit back out of the posting programme. This resets the V.A.T. rate back to the new rate. You can then go back into the posting programme and post the January items. This keeps the information neat and tidy. Should you forget to do this, then any V.A.T. element MUST be entered manually so that it agrees with the invoice or credit note 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 document or that you intended, and then click [Continue]. With any January invoices, you will be able to use the calculation buttons again.

Republic Of Ireland Changes

Following the ROI budget yesterday, the main rate of V.A.T. is being changed back from 21.5% to 21% as of 01/01/2010. Please follow the steps above to change your V.A.T. rates appropriately. Please check the Revenue website regularly for any last minute changes.

See also

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

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Keywords AND Misspellings

VAT, VAT1, V.A.T., rate, rates, Value added tax, changing VAT, HMRC, Revenue, Customs