News > Product News > Article

Cam Systems Software – Reduction in VAT Rate FAQs

Written by: Kieran Burroughs 28/11/2008

Cam Systems Ltd have sent out a Cameo program enhancement & instructions to all users & these FAQ responses only apply when these enhancements have been applied.

These FAQs relate specifically to your System’s functionality post deployment, we do not offer any guidance on your responsibities in accounting for your own VAT affairs, which should be sought from your Accountant &/or by accessing the HMRC website.

How do we check that the effective tax rate has changed after loading the enhancement?

In terms of sales if you start a service invoice you will encounter a VAT calculation that should be at 15% & by using £100.00 as the net figure, visually the VAT calculated % should be fairly clear.

In terms of purchases if you start to post a manual invoice you will encounter a VAT calculation that should be at 15% & by using £100.00 as the net figure, visually the VAT calculated % should be fairly clear.

Sales

Key statement: The default Standard VAT rate will be set to 15% following your November month end close.

What happens to Service Invoices that were started before the 1st December ’08 and are completed after the 1st?

Cameo recalculates VAT to the prevailing default rate when the invoice is completed, i.e. in this case 15%

How do we create a credit note in December at 17.5%?

The system’s default rate will be 15%. Should you determine that this is necessary the following process solution exists:

1. Create a new Stock Code called VATONLY. Set it to No stock control and VAT rate 7.
2. Start to raise a Credit Note (not credit an invoice) for the item(s) to be credited – this will refund VAT at 15%.
3. Add an additional stock item to the Credit Note for VATONLY, and change the value on the line to the “undervalue” of the VAT.

If you require further assistance with this, email info@cam-systems.co.uk for a “Credit Note Helpsheet”. Please give your email address, or fax number.

How do we create an invoice in December at 17.5%?

The system’s default rate will be 15%. Should you determine that this is necessary the following process solution exists:

1. Create a new Stock Code called VATONLY. Set it to No stock control and VAT rate 7.
2. Start to raise an invoice for the item(s) supplied – this will charge VAT at 15%.
3. Add an additional stock item to the Invoice for VATONLY, and change the value on the line to the additional VAT value.

If you require further assistance with this, email info@cam-systems.co.uk for an “Invoice Helpsheet”. Please give your email address, or fax number.

Purchases

Key statement: The default Standard VAT rate will be set to 15% following your November month end close.

We do not close our November’08 Purchase Ledger until the middle of December, will the system still calculate VAT at 17.5% on November transactions & before?

Yes

Whilst remaining in the November’08 Purchase Ledger period after the 1st December ’08, will we need to change the VAT calculation on Forward Posted items?

Yes, Forward Posted items will pick up 17.5% until you change your default rate after your November month end. You can alter the system’s suggested VAT calculation to match your supplier’s invoice at 15% & will be applied in the VAT allocation box with the difference recorded as a VAT only entry. The only alternative is to wait until November ’08 is closed before posting December’s invoices.

Having closed November ’08 Purchase Ledger, if we need to post an invoice dated prior to the 1st December will the system calculate at 17.5% as per my supplier’s invoice?

No, but you are able to overwrite the VAT to 17.5%. You can alter the system’s suggested VAT calculation to match your supplier’s invoice at 17.5% & will be applied in the VAT allocation box with the difference recorded as a VAT only entry.

General Ledger

Key statement: The default Standard VAT rate can be set to 15% following your November month end close.

What changes do we need to make?

Within SetUp – Vat Rates the standard rate should be changed to 15% after your November’08 month end. This VAT rate will apply to all General Ledger transactions raised in the December’08 period & beyond.

What changes are required in the VAT calculator?

None unless you have EC reported purchases that will pick up the % indicated at the top of the VAT calculator screen. This calculation is for reporting only but will prevail at the % entered in the box even if your VAT quarter straddles the 1st December’08. Therefore, on your actual return you will need to manually calculate where appropriate. Future returns from the VAT calculator should be set to 15%.