Further info can be found below also in Dimensions help files on which VAT codes should be used when processing transactions.
VAT Rates
The VAT Rates window is opened from the VAT Rates menu option.
The window contains a list of the UK VAT Rates and EC VAT Rates that exist in the system.
An initial set of VAT rates will be created with the database. Please ensure they are correct.
The system is shipped with the current UK VAT rate entered under codes 1, 11, A, R, U and V. Please check these rates are correct.
View and amend the percentage rate entered for each VAT code and enter new VAT codes and rates if required.
All rates have a code: most of the UK VAT Rates are identified by numeric codes; some use letters this helps to indicate their use; EC VAT Rates are identified by letters.
The rates for codes 0 and 8 will always be zero % and cannot be changed.
All other rates can be changed to any percentage between 0.01% and 99.99%.
Codes Usages
Codes 10, 11 and 12 are used to provide additional reporting for Cash VAT accounting <cashvat_scheme.htm>.
Code V is used for Reverse Charge accounting for VAT. Please refer to the Reverse Charge VAT <vat_revchg1.htm> topic.
Code X applies to the sale and purchase of services to and from the EU where the supply is subject to VAT. Please refer to EC Reverse Charge VAT for Services <dim00897.htm>.
Code Y applies to the sale and purchase of Services to and from the EU where the supply is not subject to VAT. Please refer to EC Reverse Charge VAT for Services <dim00897.htm>.
Print a list of the VAT rates by selecting the VAT Rate List report from the Access Crystal Reports <vat_reports_1.htm> menu.
Note: It is essential to fully understand the type of VAT Rate that is entered into Transactions to ensure that VAT Reports accurately reflect the business.
If unsure, it’s recommended to consult HM Revenue & Customs. It is the user’s responsibility to report VAT accurately.
EC VAT rates
All VAT rates are applicable to EC transactions and are identified by a code letter indicating their type and usage.
In the VAT Rates window:
If a letter appears in the EC column, this indicates the VAT rate is for EC tax.
If the EC column is blank, this indicates that the rate is a GB rate for UK VAT.
The initial set of EC VAT rates (created with the database) use the same Code to identify the rate as the EC type code. So the code will appear to be repeated in the EC column.
To insert new rates:
A prompt to identify the type of rate by selecting GB VAT or EC VAT.
Select EC VAT, there will be a prompt to select the EC VAT type appropriate to the rate.
Click Icons and menus.
Click Edit.
Click the icon to change VAT rates and to insert new ones.
Selecting a rate in the list displays its percentage value at the bottom of the window where it can be changed.
To insert a new rate:
Click Edit and click the blank entry at the bottom of the VAT Rates list.
Type a VAT code for the new entry and a VAT rate.
Select the type of VAT rate from the GB VAT menu: GB VAT or EC VAT.
GB VAT should be selected for sales and purchases to and from UK companies and foreign non-EC companies.
EC VAT should be selected for sales and purchases to and from EC companies.
There are sub-menus for both types: for GB VAT select Ordinary or Reverse Charge; for EC VAT select the VAT Type.
Select from the General menu to indicate that the rate should be used for a special purpose.
Type a description of the rate.
To save the new rate, click OK.
General
This menu enables the possibility to add an additional piece of information to a VAT Code to indicate that it is for a special purpose.
The default is General, the menu also contains Sales Invoice; Sales Credit Note; Purchase Invoice; Purchase Credit Note.
Assigning a transaction type to the VAT Rates will limit the rates that are available and displayed when entering a transaction.
For example: when entering a Sales Invoice, only VAT Rates assigned as Sales Invoice or General will be available.
Sort
This menu enables the chance to sort the VAT Rates listed by Code, Rate or EC Type.
Inactive icons
The VAT Rates window has two inactive icons to the left of the toolbar. This is correct.
American Version Unlock Key <dim00566.htm>
In this version, the Rates column heading becomes a menu button, which has two options, Show Rate Makeup and Define Headings. Define the headings first and then use these to show the makeup of the Tax.
EC VAT Codes
The following EC VAT Codes are used when entering transactions;
Sales Ledger
EC Customer with a tax registration number:
G – 0.00% Goods and Related Services
VAT is not charged to EC Customers when their Tax Registration number is known (i.e. entered on the Customer Record).
S – 0.00% Non-Related Services may be substituted.
X – EU Reverse Charge VATable Service
Reverse charge VAT is not calculated for Sales transactions. The VAT Rate is set to blank and the invoice document will be annotated to advise the customer that they must account for the Output tax on these items.
Y – EU Reverse Charge Non-VATable Service
Reverse Charge VAT is not calculated for Sales transactions.
EC Customer with no Tax Registration number, but the Country record has a Tax Representative number entered:
T – 0.00% Non-Registered WITH Tax Rep
If the Customers tax registration is not known (or they are not registered) but the user has a Tax Representative in the country of the Customer then Vat should not be charged. The Tax Representative number is entered on the Country Record but is for info purposes only.
To correctly pull through VAT Code T on a Sales Ledger or Sales Order transaction, T should be entered as the default VAT Code on the Customer record.
EC Customer with no Tax Registration number and no Tax Rep number entered in the Country Record:
U – Standard Rate - Non-Registered NO Tax Rep
If the Customers tax registration is not known (or they are not registered) and the user does not have a Tax Representative in the country of the Customer then Vat is charged at the standard rate for the goods/services being supplied.
SOP
The rules shown above for Sales Ledger transactions are applied using the VAT status and Tax registration from the Delivery Address. See Destination VAT.
Purchase Ledger / POP
EC Supplier with a Tax Registration number:
A – Standard Rate - Acquisitions of Goods and Related Services
If the user is VAT registered and receiving goods from a tax registered EC Supplier then Acquisition tax must be accounted for on the VAT Return.
NOT THE GROSS Acquisition tax is added to the invoice VALUE, and included on the VAT Return within the Input tax total.
It is also shown in Box 2 and added to the Outputs on the return so no tax is actually claimed or paid – it is for statistical purposes only.
Access Accounts will default to VAT Code However if the Supplier is known to be tax registered but the Tax Registration number has not been A for an EC Supplier, only if the tax registration number has been entered in the Supplier Record, then Tax Code A should be entered at the time of the purchase transaction entry to ensure that the VAT Return is correctly updated.
X – Standard Rate - Reverse Charge VATable Service
Reverse Charge VAT (X) updates the VAT Return but does not update the Purchase Ledger.
When entering Net values, Reverse Charge VAT is not added to the Gross value.
When entering Gross values, Reverse Charge VAT is not deducted from the Net value.
The user may edit the Reverse Charge VAT value but this will not affect the Net or Gross values although the updated value is updated to the VAT Return.
Y – EU Reverse Charge Non-VATable Service
Reverse Charge VAT is not calculated.
EC Supplier with no Tax Registration number:
T – 0.00% Non-Registered WITH Tax Representative
Tax Code T is used for Suppliers with no Tax Registration number to ensure that VAT is not entered but the transaction is saved as an EC transaction.
Note: If tax is being charged by the Supplier, then it is entered as part of the net value of the transaction. It is not entered as VAT – VAT is the UK tax only.