IanSewell
Active Member
I have just been informed that the HMRC are demanding a changed to the way VAT is calculated and reported on invoices. At the moment in the UK the VAT is applied to an invoice assuming the prompt payment discount is taken i.e. net of 100 with 5% discount give you a 100 NET + 19 VAT @ 20% for 119 Gross.
The HMRC are now insisting that the full amounts is shown on the invoice 100 + 20 = 120 and the reduced amounts 95 + 19 = 114. This not to bad as it just requires changes to the numbers on the invoice but we can only post one set of figures to the AR ledger. We don't know if the customer will take the discount or not when we invoice. So we put the higher amounts on the ledgers but if they pay the reduced amount then we need to reduce the VAT that we recorded at invoice time.
To do this we need to match of the £1 reduction in VAT back to the VAT accounts at receipt time. Again this is not hard as they need to do a GL match when they receipt but the users want this done automatically!
I anyone aware of this and are they putting something in place to deal with this in their system (BTW we use JDE World and 7.3 and will not be upgrading anytime soon!)
Ian
The HMRC are now insisting that the full amounts is shown on the invoice 100 + 20 = 120 and the reduced amounts 95 + 19 = 114. This not to bad as it just requires changes to the numbers on the invoice but we can only post one set of figures to the AR ledger. We don't know if the customer will take the discount or not when we invoice. So we put the higher amounts on the ledgers but if they pay the reduced amount then we need to reduce the VAT that we recorded at invoice time.
To do this we need to match of the £1 reduction in VAT back to the VAT accounts at receipt time. Again this is not hard as they need to do a GL match when they receipt but the users want this done automatically!
I anyone aware of this and are they putting something in place to deal with this in their system (BTW we use JDE World and 7.3 and will not be upgrading anytime soon!)
Ian
