VAT rate change
The VAT rate will change from 17.5% to 20% with effect from Tuesday 4th January 2011. To affect this increase in VAT you will need to change the VAT settings in Sage Accounts. This can be done from within Sage by selecting, Settings – Configuration – Tax Codes and amending your VAT rates.
There are 2 schools of thought on how best to implement a VAT rate change. The first is to create an alternative T code reflecting a rate of 20% and substitute the old for the new to affect the change. The second is to simply amend the existing T code (usually T1) from 17.5% to 20%. Changing the existing T1 code will ensure that the change in percentage cascades down across all existing products within Sage, automatically.
Separating sales
Whichever method you choose to make the change, you will still need to ensure that UK Vatable sales made prior to 4th January 2011 are processed in Sage reflecting at 17.5% VAT and those sales that occur on or after 4th January 2011 are processed in Sage reflecting a 20% rate of VAT. The sequence for doing this would therefore be:
- Download all sales up to and including 3rd January 2011 and process in Sage using the 17.5% VAT rate
- Change VAT rate in Sage to 20%
- Import all sales from 4th January 2011 onwards and process in Sage using the 20% VAT rate.
Here are a couple of tips from Tradebox:
- Before you begin with this process, take a back up in Sage. It sounds obvious but it’s surprising how many people don’t use this function and get caught out. Taking a back up allows you to start again if you make mistakes.
- If you use Tradebox to import sales, try where possible, to separate sales using the existing controls, such as the synch from and synch to tools.
- Remember, Tradebox creates ‘unposted’ invoices in Sage. This means that they can always be deleted if they are created using the incorrect VAT rate.
- If the channel you are importing from doesn’t enable date controls, try and mitigate your admin by manually separating the sales within the import file first.
- If sales do get processed with the wrong VAT rate, delete the unposted invoice from Sage and then remember to delete the sale from the Tradebox database so you can re-import it and create it again in Sage with the correct VAT rate. Individual sales can be deleted from the Tradebox database by ticking them in completed sales list and selecting delete.