Sage VAT increases
On 1st January 2010, the standard rate of VAT increases from 15% to 17.5%.
This guidance is based on the latest advice from Sage's website. If you have a customised or updated system, please call our support desk on
0121 384 2513
Sage 50 -
Sage 50 Manufacturing -
Sage Line 100 -
Sage MMS -
Sage 200 -
Sage 200 Manufacturing
To account for this change in Sage Accounts, you should check and amend the
following:
- Change the rate on the standard VAT tax code, T1 by default, from 15% to
17.5%.
- Change the rate on any outstanding invoices, credits, sales orders and
purchase orders.
- Amend the VAT amount on relevant bank recurring entries.
- Amend the VAT amount on memorised and recurring invoices, credits, sales
orders and purchase orders.
If you are using Sage 50 Accounts 2007 or above, you can download the VAT Change Facility by accessing the
Sage support updates page. Please note this facility does not update memorised or recurring
invoices, orders, bank transactions or batch information. If required, you must
update these manually.
You do not need to alter any settings in your manufacturing software. You will need to alter the standard rate of VAT in your accounting package (see above for Sage 50 Accounts).
Testing was performed on Line 100 v7.6 and Line 100 Windows 8.5. The below applies to these versions.
Important Notice:
We recommend you backup your data directory before implementing the VAT change.
Also that all sales and purchase postings are updated before proceeding.
Changing the VAT rate in Line 100
To change the standard rate of VAT you will need to do the following:
- Accounting System Manager
- System Parameters
- Vat Rates
- Select the standard rate tax code and select
- Then edit the vat rate field and enter the rate of 17.5%
You should edit the EC Standard purchase ledger (PL)Code (Purchases, Goods an related Services ) to 17.5%
To credit an invoice at the old rate
There may be occasions when you need to credit invoices at the old vat rate. If you need to do this, you should create a new tax code at the old rate of VAT. You can do this as follows:
- Accounting System Manager
-
System Parameters
-
Vat Rates
- Move down to locate an empty field and enter in a relevant tax code number and description
- Tick the option for include in vat return
-
Enter rate of 15%
-
Ensure relevant Input/ Output Nominal Codes and also relevant cost centres
Please note that the EC purchase flag should not be selected.
Entering Late Suppliers Invoices/ Supplier Purchase Orders
1. If you receive an invoice from a supplier that you need to enter at the old rate of VAT, you must manually amend the VAT amount. To do this simply over type the VAT amount with the correct value on the Invoice/ Order entry screen.
2. If you receive an order from a supplier that you need to enter at the old rate of VAT. Ensure when entering the order that you select the relevant tax rate.
Create an invoice at the new rate of VAT
The invoice will post correctly at the rate 17.5% once the section "Changing the VAT rate in Line 100" has been implemented.
Observations
Existing Sales & Purchase Orders
Existing sales and purchases orders entered into the system can be viewed using the Screen Enquiries option. Caution should be used when selecting to Amend Order once you have followed the section “Changing the VAT rate in Line 100”.
Re-printing invoices & Backup
All invoices re-printed after changing the VAT rate to 17.5% will print at that rate even if the invoice was originally printed at the 15%.
As a workaround we would suggest taking a backup of the data prior to changing the rate and use this backup to access the data via a new company to reprint any historical invoices.
Unposted Invoices through Sales Order Processing (SOP)
Any invoices printed but not posted before you followed the section “Change the VAT rate in Line 100”, will be posted at the new rate.
Unposted Invoices through Invoicing
It is advisable to print and post invoices prior to following the section “Changing the VAT rate in Line 100”.
Sage is continuing to perform testing, if we discover any additional recommendations we will publish updates on this article.
Important Notice:
We recommend that you print & post any invoices that are presently in the system that require to be invoiced at the 15% rate before following any of the advice below.
Changing the VAT rate in Sage MMS
To change the standard rate of VAT you will need to do the following:
- Accounting System Manager
- Settings
- Edit the Standard tax code to 17.5%
You should also edit the EC Standard Purchase Ledger (PL) Code (Purchases, Good and related Services) to 17.5%
To credit an invoice at the old rate
There may be occasions when you need to credit invoices at the old vat rate. If you need to do this, you should create a new tax code at the old rate of VAT. You can do this as follows:
- Accounting System Manager
- Settings
- Tax Rates, the Accounting System Manager Tax rate details box appears
- Choose Add
- Enter a description of your choice
- Select Vat Return Option
- Enter “Not Applicable” in the EC terms box
- Enter the rate of 15%
- Ensure relevant Input/ Output Nominal Codes
Entering Late Suppliers Invoices/ Supplier Purchase Orders
If you receive an order from a supplier that you need to enter at the old rate of VAT. Ensure when entering the order that you select the relevant tax rate.
Create an invoice at the new rate of VAT
The invoice will post correctly at the rate 17.5% once the section “Changing the VAT rate in Sage MMS” has been followed.
Observations
Existing Sales & Purchase Orders
Existing sales and purchases orders entered into the system can be viewed using the View Order option. Caution should be used when selecting to Amend Order once you followed the section “Changing the VAT rate in Sage MMS” has been followed.
Re-Printing Invoices
For invoices entered in the system the vat summary section will show the vat rate as displayed in the Accounting System Vat Rate settings section however all monetary values will be based on the vat rate selected at point of invoice posting.
Copy SOP Order
If you copy a SOP order that was created before you followed the section “Changing the VAT rate in Sage MMS” ensure that you check all values on the order.
Recording Payments In Advance
We would recommend that any orders entered in the system before the change in tax rate and have advance payments associated with them, are checked to ensure that the reduction in VAT has not resulted in the payment value being greater than the value of the goods.
Sage is continuing to perform testing, if we discover any additional recommendations we will publish updates on this article.
Important Notice:
We recommend that you print & post any invoices that are presently
in the system that require to be invoiced at the 15% rate before
following any of the advice below.
Changing the VAT rate in Sage 200
To change the standard rate of VAT you will need to do the following:
- Accounting System Manager
- Settings
- Edit the Standard tax code to 17.5%
You should also edit the EC Standard Purchase Ledger (PL) Code (Purchases, Good and related Services) to 17.5%
To credit an invoice at the old rate
There
may be occasions when you need to credit invoices at the old vat rate.
If you need to do this, you should create a new tax code at the old
rate of VAT. You can do this as follows:
- Accounting System Manager
- Settings
- Tax Rates, the Accounting System Manager Tax rate details box appears
- Choose Add
- Enter a description of your choice
- Select Vat Return Option
- Enter “Not Applicable” in the EC terms box
- Enter the rate of 15%
- Ensure relevant Input/ Output Nominal Codes
Entering Late Suppliers Invoices/ Supplier Purchase Orders
If
you receive an order from a supplier that you need to enter at the old
rate of VAT. Ensure when entering the order that you select the
relevant tax rate.
Create an invoice at the new rate of VAT
The
invoice will post correctly at the rate 17.5% once the section “Changing
the VAT rate in Sage 200” has been followed.
Observations
Existing Sales & Purchase Orders
Existing
sales and purchases orders entered into the system can be viewed using
the View Order option. Caution should be used when selecting to Amend
Order once you followed the section “Changing the VAT rate in Sage 200” has been followed.
Re-Printing Invoices
For
invoices entered in the system the vat summary section will show the
vat rate as displayed in the Accounting System Vat Rate settings
section however all monetary values will be based on the vat rate
selected at point of invoice posting.
Copy SOP Order
If
you copy a SOP order that was created before you followed the section
“Changing the VAT rate in Sage 200” ensure that you check
all values on the order.
Recording Payments In Advance
We
would recommend that any orders entered in the system before the change
in tax rate and have advance payments associated with them, are checked
to ensure that the reduction in VAT has not resulted in the payment
value being greater than the value of the goods.
Sage is continuing to perform testing, if we discover any additional recommendations we will publish updates on this article.
You do not need to alter any settings in your manufacturing software.
You will need to alter the standard rate of VAT in your accounting
package (see above for Sage 200 Accounts).