Language:


VAT Codes - Flip A

This page describes Flip A of the VAT Codes setting. Please follow the links below for descriptions of the other parts of the setting:
---

Code
Each VAT Code record should be identified by a unique Code.

Excl %
Specify the percentage to be applied to a figure that excludes VAT in order to calculate the VAT amount.

You must specify an Input or Output Account if the percentage is zero, as shown in the illustration above.

Incl %
Specify the percentage to be applied to a figure that includes VAT in order to calculate the VAT amount.

Outp A/C
Paste Special    Account register, Nominal Ledger/System module
Specify here the Output VAT Account to be credited whenever you use the VAT Code in a sales transaction.

In any Nominal Ledger Transaction resulting from Purchase Invoices from the EU Zone, VAT is debited to the Input Account of the selected VAT Code and credited to the Output Account. Therefore, it is recommended that you use a dedicated VAT Code for VAT on EU Acquisitions, with an Output Account that is not used in any other VAT Code. Please refer here for an illustrated example.

If you would like VAT to be posted to a different Output VAT Account from Credit Notes, specify that Account on flip D.

O/P A/C
Paste Special    Account register, Nominal Ledger/System module
You only need use this field if you are using the Post Receipt VAT and/or Post Prepayment VAT options on the 'VAT & Tax' card of the Account Usage S/L setting. Users of the Cash VAT scheme in the UK will need to use both options, users resident in the Baltic States may only need to use the Post Prepayment VAT option, and users in Poland may only need to use the Post Receipt VAT option.

You should use the Post Receipt VAT option when you need your output VAT liability to be calculated from your Receipts, not from your Invoices. In this case, the Outp A/C will be treated as a preliminary Output VAT Account, to be credited whenever you mark an Invoice as OK. When the Invoice is paid, the Transaction from the Receipt will include an extra VAT element, in which the VAT is moved from the Outp A/C to the O/P A/C. The O/P A/C will therefore become the final Output VAT Account. The Post Receipt VAT option will also post VAT from On Account Receipts (Receipts with no Invoice Number or Prepayment Number).

If you are using the Post Prepayment VAT option, VAT will also be posted from Prepayment Receipts (Receipts with no Invoice Number but with a Prepayment Number). VAT will be credited to the O/P A/C and debited to the Prepayment VAT Account specified in the Account Usage S/L setting.

In all cases, if a particular VAT Code does not have an O/P Account, the VAT (C/A) Account from the 'VAT / Tax' card of the Account Usage S/L setting will be used instead.

If you are using this feature, don't forget to alter the definition of the VAT Report so that it uses the O/P Account and not the Outp Account.

Inp A/C
Paste Special    Account register, Nominal Ledger/System module
Specify here the Input VAT Account to be debited whenever you use the VAT Code in a purchase transaction.

If you would like VAT to be posted to a different Input VAT Account from Credit Notes, specify that Account on flip D.

I/P A/C
Paste Special    Account register, Nominal Ledger/System module
You only need use this field if you are using the Post Payment VAT and/or Post Prepayment VAT options on the 'VAT' card of the Account Usage P/L setting. This will be the case for users in Latvia and for users of the Cash VAT scheme in the UK. Users in Poland may only need to use the Post Payment VAT option.

You should use the Post Payment VAT option when you need the value of the input VAT that you can reclaim to be calculated from your Payments, not from your Purchase Invoices. In this case, the Inp A/C will be treated as a preliminary Input VAT Account, to be debited whenever you mark a Purchase Invoice as OK. When you pay the Purchase Invoice, the Transaction from the Payment will include an extra VAT element, in which the VAT is moved from the Inp A/C to the I/P A/C. The I/P A/C will therefore become the final Input VAT Account. The Post Payment VAT option will also post VAT from On Account Payments (Payments with no Invoice Number or Prepayment Number).

If you are using the Post Prepayment VAT option, VAT will also be posted from Prepayment Payments (Payments with no Invoice Number but with a Prepayment Number). VAT will be debited to the I/P A/C and credited to the On Account VAT Account specified in the Account Usage P/L setting.

In all cases except the On Account Payment, if a particular VAT Code does not have an I/P Account, the Prepayment VAT Account from the 'VAT' card of the Account Usage P/L setting will be used instead. An On Account Payment requires an I/P Account.

If you are using this feature, don't forget to alter the definition of the VAT Report so that it uses the I/P Account and not the Inp Account.

Description
The description that you enter here will appear in the 'Paste Special' list, so should be detailed enough to ensure the correct VAT Code is always chosen.
---

Settings in the Nominal Ledger: