How to Account for the Second Reduced VAT Rate of 9%

Transcription

1 How to Account for the Second Reduced VAT Rate of 9% From 1 st July 2011, a second reduced rate of VAT will be introduced at 9%. This will be introduced in respect of certain goods and services (mainly related to tourism) for the period 1 st July 2011 to 31 st December 2013 The new 9% rate will be applied to the following supplies of goods and services: Catering and restaurant supplies, including vending machines and take-away food (excluding alcohol and soft drinks sold as part of the meal) Hotel lettings, including guesthouses, caravan parks, camping sites etc. Cinemas, theatres, certain musical performances, museums, art gallery exhibitions Fairgrounds or amusement park services Facilities for taking part in sporting activities including green fees charged for golf and subscriptions charged by non-member-owned golf clubs Printed matter e.g. newspapers, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books) Hairdressing services For more information on the introduction of the new VAT rate, please refer to the guidance document published on the Irish Revenue Commissioners website: Note: Sage is unable to advise which VAT rate is applicable in specific circumstances. Any such queries must be directed to the Irish Revenue Commissioners. Please ensure a full backup is taken prior to making any changes to your Sage program The purpose of this Knowledge Base article is to explain the implications of the extra VAT rate in Sage Accounts. The article includes the following sections: How to Add the VAT Rate in Sage Accounts - This section explains how to add the new reduced VAT Rate in Sage Accounts to reflect the changes in legislation. How to Edit Existing Product Invoices - This section will explains what effect the new rates will have on invoices that have not yet been updated.

2 How to Add the Second Reduced VAT Rate in Sage Accounts In Sage Accounts, an unused tax code should be selected and amended to the new rate of 9%. To do this, carry out the following steps: 1. Select the Settings Configuration menu option. 2. Select the Tax Codes tab. Note: In Sage Accounts Version 9.xx, instead of the above, select the Settings - Tax Codes menu option. 3. The Tax Codes tab opens. This shows the current VAT codes and their rates. From the list of tax codes, select one of the unused Tax Codes, and then click Edit. 4. The Edit Tax Code window opens: In the Rate field, change the rate to 9.00, ensure include in vat return is ticked, enter a description and then click OK to apply the rate. 5. Click Apply and then Close. Note: If you are using Sage Accounts v2008 or earlier, click No when you are prompted to save changes. Note: Only future Customer/Supplier/Product records are updated if they have default tax code of T5. The change you have made will not update any existing transactions on the system.

3 How to Edit Existing Product Invoices Any invoices created through the Invoicing Module before the 1 st July 2011, but not updated and issued until after this date, may require the new VAT rate to be applied. In this case, each item line of the invoice must be recalculated. 1. Open the Invoicing Module. 2. Select an invoice that has not yet been posted. 3. Click the New/Edit button. 4. The invoice opens. Click the arrow in the description cell of each line that uses the old 13.5% VAT rate, as indicated below.

4 5. The Edit Item Line window opens. In the Tax Code field (highlighted below in red), the 13.5% VAT rate is specified.

5 6. To change the individual item line you must select the Tax Code with the new rate for this value. When you do this, the VAT Amount updates. Important Note: This procedure must be carried out for all invoices that have not yet been updated, and are subject to VAT at the new rate. The procedure must also be carried out for any Sales Order, Purchase Order, Quote, Credit Note or Pro Formas that have not yet been updated.