1st DEC 2008 VAT Changes and Recommendations

In his Pre-budget Report on 24th November 2008 the Chancellor announced that the standard rate of Vat will be reduced to 15% on 1st December 2008. The following instructions provide advice in modifying your Esprit & Quantum configurations to deal with this change.

To implement the change for the system to recognise the new rate an alteration to the VAT file record is required. However to ensure accurate reporting in the future and to enable continued use of the old rate for crediting the additional changes are recommended.

We hope this provides a clear instruction of how to deal with this unforeseen announcement and demonstrates the simplicity of the changes required but should you have any further questions please do not hesitate to call us on 01925 732 333.

Further information should also be obtained from the government website as clearly we cannot advise on matters affecting your reporting to them

Making the changes

Users of the Esprit & Quantum Sales Ledgers can use the “Run a Program” prompt to run BCT6OF37 and select option 1 “MOD/01”. Return through to the following field, in bold below, and change to 15%. Now select a blank or unused code and create a new Description called “OLD VAT rate” and set the rate at 17.5%. You also need to move the corresponding Goods and VAT figures to the OLD VAT code, for reporting purposes. This code must be used when raising credit notes for invoices processed at the old rate. Note – adding or changing the VAT percentage for “This Period” also changes the percentage for “Next Period” too.

Press F8 to accept.

01BP TimberAmendVATRecord24/11/0811:10:3037
ThisPeriod:CodeDescription%GoodsVAT
1STD.___15.00 0.00 0.00
2ZERO0.000.000.00
3EXEMPT0.000.000.00
4OLD VAT17.50192357.8833646.26
50.000.000.00
60.000.000.00
NextPeriod:CodeDescription%GoodsVAT
1STD.15.00 0.000.00
2ZERO0.000.000.00
3EXEMPT0.000.000.00
4OLD VAT17.501280.40224.07
50.000.000.00
60.000.000.00

Customers using Esprit Purchase Ledger (Quantum Purchase Ledger customers can ignore this part) can use the “Run a Program” prompt to run BCT5PL12 and select option 2 “Amend VAT record”. Return through to the following field, in bold below, and change to 15%. Now select a blank or unused code and create a new Description called “OLD VAT rate” and set the rate at 17.5%. You also need to move the corresponding Goods and VAT figures to the OLD VAT code, for reporting purposes. This code must be used when raising credit notes to suppliers for invoices processed at the old rate. Note - adding or changing the VAT percentage for “This Period” also changes the percentage for “Next Period” too.

Press F8 to accept.

01BP TimberAmendPurchase VATRecord24/11/0811:10:3037
ThisPeriod:CodeDescription%GoodsVAT
1STD.___15.00 0.00 0.00
2ZERO0.000.000.00
3EXEMPT0.000.000.00
4OLD VAT17.50192357.8833646.26
50.000.000.00
60.000.000.00
NextPeriod:CodeDescription%GoodsVAT
1STD.15.00 0.000.00
2ZERO0.000.000.00
3EXEMPT0.000.000.00
4OLD VAT17.501280.40224.07
50.000.000.00
60.000.000.00

Considerations

All Sales Orders raised for November 2008 and before must be processed and invoiced prior to changing the VAT rate to 15% on 1st December 2008.

The advice we have been given is that sales invoices raised at the current vat rate of 17.5% should be credited at this rate but please verify this with your accountants or revenue and customs office or visit the site for further information

Each line on a credit note raised for sales orders processed at the old VAT rate will need to be amended. At the Accept prompt for each line press F7 to amend the VAT field from “1” Standard VAT rate to the number that corresponds to the OLD VAT rate, i.e. 4 in the example below (bold).

01BPTimber CollectionNoteEntry25/11/0810:39:45E1
BranchNo.[1]Margin24.21-
AccountNo.BQ/0200601B.Q.V.LtdT/AHancockHall'Total24.21-
%100.00
Order1233620NettSales
LN-LN-ProductCode-Description------Quantity----Price-----Amount-
11000159DWL000532x140mmP/PACKEDDOORLINER024.2124.21-
(2'6"/2'9"HEAD)28/PKEach
---ProductCode--Description-ASH=OFF------Quantity---Price---Reg.---Disc1-V
d032140S9Disc2Disc3
0199WDL000532x140mmP/PACKEDDOORLINER24.210.000.00
(2'6"/2'9"HEAD)28/PKEach0.000.004
Amount24.21-N0
Code/Find/Normalline

NB: Some users have enhancement 8PB579 switched on which prevents the VAT rate from being amended. This enhancement will need turning off.

All Purchase Orders raised and goods received for November 2008 and before must be processed through Purchase Invoice Registration using the OLD VAT rate as detailed above.

All Supplier Returns Notes raised against Purchase Orders where the VAT rate was 17.5% must also be processed through Purchase Invoice Registration using the OLD VAT rate as detailed above.

Deposits - You should account for VAT on a deposit at the rate in force when you receive it. If you receive a deposit before 1 December 2008 for goods or services that you will supply after the rate change you have the option of applying the 15% rate of VAT

Quantum Financials

For manual postings within Quantum Financials, the VAT code will need to be amended. In the short term there may be postings at both 17.5% and the new VAT rate, therefore both values will need to be maintained.

Click on Key Lists. This will bring up the maintenance option. Click on VAT and then Details. This will display the VAT rates configured in the system.

Click on the standard rate (typically 1) and set the value to be the new rate.

Create a new entry using a value currently not in use, and set this to 17.5 and Add.

When entering documents using a Multi-Vat rate input form, the user will now have the option of which VAT rate to use.

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