VAT

EU VAT Reporting for UK Organisations

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on May 09, 2011 by Gidon@AccountsPortal

These changes affect all VAT Registered users, regardless of your country, so please take a moment to find out how they may impact you.

New functionality has been introduced allowing full reporting of EU transactions for UK organisations. All transactions in which you specify a VAT Code will now have a new field called VAT Treatment. This field allows the user to indicate whether the VAT transaction relates to dealings with UK, EU or other International Customers/Suppliers. The VAT Treatment is then used to correctly compile your VAT Report and update the reporting Boxes relevant to transactions with non-UK parties.

EU VAT

How does this affect you? Well, that depends on your situation:

1. I am not registered for VAT
Jackpot! You are not directly affected by these changes. You will, however, need to download the new Import templates if you import Customers, Suppliers or Invoices.

2. I am registered for VAT but don't transact with EU Customers or Suppliers
Don't sweat, you'll hardly even notice! As above, you will need to download the new Import templates. There is one very important change you need to be aware. The new VAT Treatment field will be available on certain transactions and in most cases you can just leave the default. The one exception is if you are processing a refund or return using the bank transactions Receive Money or Spend Money (with Type 'General'). In such cases, you will need to change the default VAT Treatment. Please read more about this at the top of VAT UK - Box by Box.

3. I am registered for VAT and transact with EU Customers or Suppliers
Double jackpot! AccountsPortal now provides for full EU VAT Reporting. You are also affected by the items mentioned in 1. & 2. above so please review these before reading about the new EU VAT features.

  • Transactions relating to an EU or International Customers/Suppliers can be identified by selecting the appropriate VAT Treatment.
  • Customer VAT Numbers are now printed on Invoices and Credit Notes.
  • EC Sales List introduced as a new report.
  • Bank Import Rules have been updated to store VAT Treatment. Please edit your existing rules where necessary.
  • Import templates have been updated. You will need to download the new templates before importing any data.
  • Recurring Invoices for EU and International Customers/Suppliers will need to be updated regarding VAT Treatment.

If you have the time, we recommend you visit the HMRC website to find out more about VAT reporting requirements for international trade. VAT Reporting requirements for International trade can be quite complex and will depend on the nature of your business as well as the nature of your Customer/Supplier (are they individuals or VAT registered entities?). Our recommended approach is that you first determine your requirements and then review them against our VAT UK - Box by Box help document to get clarity on how these transactions should be entered.

VAT Reporting for International Organisations

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on March 13, 2011 by Gidon@AccountsPortal

Our customer base is spreading rapidly...AccountsPortal now has users from four different continents! The format of the existing VAT Report was initially based on UK VAT requirements. The values have always been correct but the display is not quite ideal if you are VAT Registered in a different country. With this in mind, we have introduced a more generic VAT Report for our international customers. All you need to do is ensure you have correctly set the Country field in your Organisation's settings.

VAT International

 

Note: We refer to the Value Added Tax system as VAT. In some countries, eg Australia and New Zealand, this is known as GST.

VAT Registered Users - Transactions Missing from VAT Report

3 Comments Published in 
on February 20, 2011 by Gidon@AccountsPortal

The Issue

One of our users raised a ticket via the helpdesk querying the result of their VAT Report. They provided us with a login to their organisation so we could do a bit of investigating and this is what we found:

15/09/2010
User completes and saves VAT Report for quarter 01/06/2010 - 31/08/2010. Results are submitted to the revenue service.

24/09/2010
User enters Sales Invoice INV9999 with a transaction date of 31/08/2010.

15/01/2011
User completes and saves VAT Report for quarter 01/09/2010 - 31/12/2010. User queries why INV9999 is not included in the VAT Report.

The key here is the transaction date that has been used. The invoice was only entered into AccountsPortal after the first VAT Report was created but the transaction date is not applicable to the date range of the second VAT Report. INV9999 was not included in the second VAT Report because the transaction date of 31/08/2010 is earlier than 01/09/2010.

 

The Solution

On the 15/01/2011 the VAT Report should be run for the period 01/06/2010 to 31/12/2010. This will pick up any transactions that were missed in the initial VAT Report run on 15/09/2010. There is no risk of duplication as transactions saved in a VAT Report will not appear in a second VAT Report even if the Start and End dates of the two reports overlap.

Entering transactions with earlier dates is a legitimate requirement but to help avoid this issue, we will look at adding a warning message if the transaction date falls into a period for which a VAT Report has already been saved.

 

Does this apply to VAT on the Accrual Basis and the Cash Basis?

Yes! The principle is exactly the same regardless of which VAT basis you use. If you are on the Cash Basis, be mindful if you enter advance payments and only subsequently apply them to invoices which are dated later than the advance. Make sure your VAT Report includes the transaction date of the original advance payment.

 

How do I know if I have missed any transactions in my saved VAT Reports?

It is quite likely that some of you will have backdated VAT relevant invoices or payments at some point. The easiest way to check if any of these have been missed out of saved VAT Reports is to go to the VAT Report screen, create a New VAT Report and set the range to include the start date of your first saved VAT Report and the end date of your last saved VAT Report. Click on the Refresh button. If you have any values in the result, these should be investigated and if applicable, included in your next VAT Report that you save.

If you have any questions regarding this item, please raise a ticket on the helpdesk.

The VAT rate change on 4 January 2011

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on December 17, 2010 by Jon@AccountsPortal

On the 4th of January 2011, the standard rate of VAT will change from 17.5% to 20% in the UK.

In addition to the existing rates, the 20% rate will shortly be available for invoices, recurring invoices, credit notes and bank transactions.

Please check the HMRC website (http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-increase.htm) for specific information on how to manage invoices raised after 4 January 2011 relating to sales/services provided prior to this date. The HMRC also explains how to manage VAT on sales/services provided before and afer this date that are billed on a single invoice.

If you are registered on the Flat Rate Scheme, then you will need to create a new VAT Status before you start entering data. More information on the new VAT thresholds are available on the HMRC website: http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm#2.

We will automatically make the following changes at midnight on the 3rd of January 2011:

  • All Recurring Invoice items with a vat rate of 17.5% will be changed to 20%.
  • All Chart of Accounts items with a default vat rate of 17.5% will be changed to 20%. For invoices dated prior to 4 january 2011, please check that you are using the correct VAT rate, as the default will show 20% and you may need to use the 17.5% rate.
  • All Bank Import Rules with a vat rate of 17.5% will be changed to 20%.
  • All Price List items with a vat rate of 17.5% will be changed to 20%.

You can, of course, change any of the above items yourself prior to the 4th of January if you wish.

Flat Rate VAT - Accounting Implications

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on April 22, 2010 by Tracy@AccountsPortal

We've had a few inquiries from clients as to how flat rate VAT works in AccountsPortal.

Before we go into that detail, it may be a good idea to go through the background to flat rate VAT first. The HMRC website is a great place to start.

Some important points to bear in mind:

  • You can only register for the Flat Rate Scheme (FRS) if your annual taxable turnover is less than £150,000. Your annual taxable turnover is the total of all the vatable items that you sell during the year.
  • You can stay on the FRS as long as your total business income is less than £225,000 per annum.
  • You still need to show VAT on each sales invoice (note that this is not your flat rate!).
  • You pay VAT as a fixed percentage of your VAT inclusive turnover. The actual percentage depends on your business - see FRS percentages for more information. You get a 1% discount in your first year of FRS registration.
  • You cannot claim back VAT on purchases (unless they are in respect of capital assets worth more than £2,000).
  • One of the main reasons for the FRS is simplicity of record keeping, although in practise this is not always the case!
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