HMRC exclusive briefing for BASDA members re VAT changes
BASDA’s close engagement with HMRC on the Pre-Budget Report ensured that BASDA members were briefed this afternoon as the Chancellor delivered his speech to the House of Commons.
The briefing documents provide guidance on how the new VAT code could be handled, given that it is a temporary measure, making it easier for BASDA members and their customers.
For a copy of the members briefing documents, please contact BASDA on 01494 868030 or email info@basda.org
There is some debate in the industry with regards to the best approach to take – whether to edit the percentage of your current VAT code, or whether to create a new VAT code which will become the new default as at 1st December. The current industry consensus is that changing the percentage against the current VAT code is the easiest solution to deliver. This is bearing in mind that we have millions of businesses who will each be adjusting their systems for 1st December deadline. You will each need to examine the options available and may want to consider such issues as :
- Impact on audit data by having one code serving 2 historic percentage rates
- The impact if you have date-sensitive VAT rate changes
- Need to be able to continue to transact at 17.5% after 1st December for Credit Notes, posting of older Purchase Invoices, and cash Accounting payments
- Interaction with other systems that integrate with your accounts software
- Impact on reports and documents when making a rate change
- Necessity to apply VAT rate changes against Acquisition Tax and other VAT rates
- Impact and treatment of part-processed transactions that span the changeover date ie: part-invoiced Sales Orders, automated Recurring/Repeat transactions
- Impact on invoice matching routines where the expected gross value may have changed
- Mechanisms to allow users to review and change their pricing if using Gross prices for the retail trade and issues on price-point pricing
We trust that that the above is useful in assisting your company in meeting these challenges. If you are experiencing different challenges or have come up with an alternative solution, pleased let us know so that we can add to our ongoing discussions.