Before Your Masterfile VAT Rate Is Changed Please Make Sure ALL PRINTED Invoices Are Updated

VAT Change in CHARISMA

Issued Thursday 19th August 2010

Following government announcements the standard rate of VAT was returned to 17.50% on 1st January 2010 and will now be increased to 20.00 % at midnight on the 3rd January 2011. The following instructions provide advice on modifying your CHARISMA configuration and Masterfile to deal with this change.

To implement the change, for the system to recognise the new rate, an alteration to the Masterfile 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.

Before your Masterfile VAT rate is changed please make sure ALL PRINTED invoices are updated to the sales and nominal ledgers and your output/input VAT is journalled as the example below suggests to the relevant existing vacant nominal codes. We advise that you run an NLR14/NLR1/NLR5 before and after journal postings and retain for auditing purposes. After the VAT Mast changes have been made all current orders, back orders, forward orders and unprinted confirmed orders will be calculated at the new VAT rate of 20.00%

Example – Sales Output VAT journal out of 999001 and 032001 into existing nominal code e.g. 999005 and 032005 - Year to date figure.

Purchase Input VAT journal out of 998001 and 031001 into existing nominal code e.g. 998005 and 031005 – Year to date figure.

Customers utilising our Intrastat module will also need to journal the relevant VAT on acquisition codes. These users however still have to make the necessary changes to the MAST records.

MAST option 2 VAT

Change the relevant VAT code which relates to the 17.50% rate to 20.00%

Enter 17.50% in any UNUSED VAT code field from 3 – 7. (Fields 1 and 2 are most commonly used for the current national VAT rate and often a zero rate for VAT free items such as foodstuffs. Fields 8 & 9 are reserved for EC & export codes.)

This new VAT code will need to be used for crediting invoices which were raised at 17.50% but please verify this with your accountants or revenue and customs office or visit the www.hmrc.gov.uk site for further information.

Please note that when credit tagging invoices at the old VAT rate 17.50% the user will have to manually change each VAT code to the example VAT code 5 by selecting and amending relevant credit lines.

Intrastat customers only

Intrastat customers only

Purchase ledger GRN matching

Existing purchase orders that require PLP10 GRN matching at the old VAT rate of 17.50% will need to have each line manually amended to the new VAT code for 17.50%.

Example, originally a VAT code 1 (17.50%) invoice will show at 20.00%, and therefore will need to be changed to the new 17.50% code instead.

We hope this provides a clear instruction of how to deal with this announcement and demonstrates the simplicity of the changes required but should you have any further questions please do not hesitate to call us on 01342 333820.

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

HMRC VAT - Cross border vat changes 2010 – for V10.2 and V11 customers only.

Any user who purchase services from suppliers overseas or if they are involved in

supplying services to customers in the EU should be aware of the Cross Border VAT

changes that commenced Jan 2010

Please refer to belowlink to HMRC website:

http://www.hmrc.gov.uk/vat/cross-border-changes-2010.htm

We have made amendments to Charisma to facilitate these new directives and a detailed specification is available on request.

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