Add or Edit VAT Status

To add a new VAT status, or edit an existing status, perform the following steps:

• Click the Settings tab, and then VAT.
• If you have previously entered a VAT status, then this will be shown in the list; otherwise the list will be empty.
• To add a new VAT status, click the 'Add New VAT Status' button.
• To edit an existing VAT status, click the relevant row from the displayed list.
• From the resulting popup enter or amend the following information.  
  • Valid From Date: Enter the date upon which the VAT status became active.
  • VAT Scheme: Choose Standard rate or Flat rate from the drop down list. Alternatively, if you are deregistering from VAT, then you can choose Not Registered from the drop down list.
  • Flat Rate (%): If the Organisation is Flat rate registered, then a flat rate % will also be required. These are usually industry specific and can be found on your tax authoritie's website.
  • Accounting Basis: Choose Accrual Accounting or Cash Accounting from the drop down list. A simple explanation of the difference is that Accrual Accounting results in VAT being recognised based on the invoice or credit note date whereas Cash Accounting results in the VAT being recognised on the date that the invoices are paid or credit notes refunded.
  • Reporting Frequency: Choose Monthly, Quarterly or Yearly from the drop down list.
  • Memo: Enter any other optional information.
• Click the Save button.

PLEASE READ CAREFULLY:

We highly recommend that you speak to your Accountant before editing an existing VAT status. If you know your VAT Status is going to change on a certain date, then you should create the new status well in advance of that date, and prior to entering new transactions.

If the Organisation is already VAT registered, and you are changing to a different VAT scheme or accounting basis, we advise where possible, that you arrange with the HMRC for the new status to be valid from the beginning of a new period/month. This will greatly reduce the complexity of checking the values of the VAT Report before and after the change of status.

If the VAT status for the Organisation has changed, then a New Vat Status should be entered and saved, rather than editing the existing status.

If a new VAT Status is created, any existing transactions with a transaction date on or after the 'Valid From Date' will need to be opened and resaved to pick up the new VAT Status. This step is extremely important as the VAT Status is set in the transaction and referenced during creation of the VAT Report. Alternatively, you can void/delete these existing transactions and re-enter them.