VAT Rate Change Issues
December 2008
You should by now have received a letter from HMRC which aims to explain the details of the standard VAT rate change effective 1st December 2008. The definitive explanation of the VAT changes can be found at http://www.hmrc.gov.uk/pbr2008/vat-guide-det.pdf.
We advise you to thoroughly read and understand the letter and decide on which course of action you wish to take. With regard to effecting the change in Diamond Discovery software, we have identified two options. The first option will allow you to keep a separate account of transactions at each rate of VAT which will be useful if your VAT quarter spans the changeover date. The second option will simply change the rate from the changeover date.
Option 1 – Create a new VAT code for 15% rate from 1st December (This method will require changing all default VAT codes)
Option 2 - Change existing code to 15% and add new VAT code for 17.5% rate
NB. With either option, if you are maintaining VAT-inclusive selling prices in the Product/Stock file (check Product/Stock parameters), in order to pass on the 2.5% reduction to your customers, you must change the selling price accordingly, as the VAT element is calculated as a percentage of the selling price.
The full article is found within the news section of our website at: www.diamond-discovery.com/news
Return to category: Newsletter: Brilliant News - December 2008