Company - Home Defaults
Opened from Company Details, the Home Defaults dialog holds the home, currency, rounding difference, and tax defaults that were set up when the database was created. Most of the details cannot be changed once the database is in use, but some of the fields can be edited and alternative selections made.
EU State / Home Country / Home Currency Symbol - Once set to EU State, this cannot be changed. Please see the Change Home Country to EU State section, below.
EMU Member Currency - This should only be ticked for Countries that have the Euro as their Home Currency. If this option is checked, the system will enforce triangulated conversion for all transactions, in compliance with EMU legislation.
2nd Base Currency Symbol - Specify whether you will use 2nd Base Currency. Ensure you have a Backup copy of your data before selecting a 2nd Base Currency as this change cannot be reversed. If selected, the system stores 2nd Base Currency values for all transactions. You do not have to use a 2nd Base currency in order to trade in Euros but, if you do not, you will only be able to see transaction values in two currencies: Home and Foreign. Please see the Trading Currencies topic. You must then select the currency to be used:
If you want to be able to view transaction values in Euros, you will need to select the Euro (the default) as your 2nd Base currency.
If you are outside the scope of EMU, you may find the 2nd Base Currency facility useful to track the value of transactions in another currency as well as your home currency. Any currency can be selected as 2nd Base.
If you do wish to use the Euro as your 2nd Base currency, do not change the default currency symbol, as the system will interpret any other entry (such as EURO or E) as a different currency.
A new Currency record can be created from this window, enter the Symbol you wish to use and click OK. The Currency Defaults window will be opened for you to enter and print the default codes to be used for this Currency.
Rounding Difference - This option relates to the production of currency transactions and allows the software to check automatically for rounding differences when multi-line invoices are converted from the Home currency. See Rounding Difference section, below.
Home Tax - This is the name by which you refer to tax (e.g. for Home Country: GB, this shows 'VAT' by default).
VAT Settlement Discount Method - HMRC requires that calculation for VAT on all invoices is made on full price and that Customers may then recover the VAT actually paid to the Supplier. You are expected to decide, before issuing an invoice, whether to adjust your accounts by using a Credit Note or an Adjustment. See VAT on Settlement Discounts topic. Further information is also available on the GOV.uk website. This menu enables you to change the way VAT Settlement Discount is treated. The following options can be selected from the menu:
Include Settlement Discount in VAT Calculation - the default method.
Exclude Settlement Discount from VAT Calculation
Adjust Settlement Discount at point of payment
Change Home Country to EU State
Click on Edit and then on the Non EU State menu to select EU State. The Change Home Country to EU State window will be displayed.
Companies in Countries that join the EU need to change their Home Country VAT status on the day of accession.
You will be unable to change your Home Country VAT status if you have transactions in the batch. You must clear these before making this change. You should also ensure that you have a proven back-up of your data.
All Customer, Prospect and Supplier records having the Home Country Tax status will be updated automatically.
After changing your home country to be an EU Member State, all transactions will adopt EU VAT rules.
Numeric Country ID - This is required by some Countries, such as Ireland, for statistical reporting. Example codes are France = 001, GB = 006.Please consult with your local VAT authority for further guidance. This field needs to be populated and you should avoid using codes 001 to 015 which have already been allocated. This field can be edited at a later date from within the Country Records window.
Click OK to save and close the Change Home Country to EU State window. A message will ask you to confirm that you wish to change your Home Country to an EU Member State.
The only way to reverse this change will be to revert to a backup copy of your datafile.
All new transactions will adopt the EU VAT rules.
You will be returned to the Home Defaults window. You should review the other settings that affect VAT. Click OK to save the changes.
EMU Member Currency should only be ticked if you are changing your currency to Euro.
Rounding Difference
The Rounding Difference option relates to the production of currency transactions and allows the software to check automatically for rounding differences when multi-line invoices are converted from the Home currency.
This menu enables you to choose how to deal with any differences.
Post Rounding in Real Time - if a rounding difference occurs, an extra detail line will be generated as part of the transaction when the transaction is created.
No Rounding Posting - if a rounding difference occurs, an additional transaction will be generated to clear this difference when the transaction is allocated.
This facility is provided in line with BASDA’s EMU compliance standards. Access advise that you consult your accountant on the most appropriate action to take with regard to rounding differences.
VAT Settlement Discount Method
HMRC have historically allowed Suppliers to account for VAT on the discounted price, as an incentive for prompt payment, even when the discount is not taken. Therefore, now the HMRC view is in line with the Principle VAT Directive; this requires that calculation for VAT on all invoices is made on full price and Customers may recover the VAT actually paid to the Supplier. HMRC now expect each Supplier to decide, before issuing an invoice, whether to adjust their accounts by using a Credit Note or and Adjustment.
You should consult your accountant before making decisions concerning the structure of your accounts.