In his Pre-Budget Report on 24 November 2008 the Chancellor announced that the standard rate of VAT will be reduced to 15% on 1 December 2008. This means that for any sales of standard-rated goods or services that take place on or after 1 December 2008 providers should charge VAT at the new rate of 15%.
This article provides help for SellerDeck EPOS users to implement this change on their systems.
Only standard-rated sales are affected. There are no changes to sales that are zero-rated or reduced-rated for VAT, or to VAT exemptions.
When should I update my SellerDeck EPOS system with the new tax rate?
The tax change comes into force on Monday 1 December. You will need to implement any price changes between close of business on the previous working day, and opening time on the 1st.
How do I change the VAT rate in my SellerDeck EPOS system?
Is there a quick way to update my product prices?
Unfortunately there has not been time for us to provide a fully comprehensive utility to update prices for you.
If you have Microsoft Access, we have produced a SQL query that will update prices for you. You can obtain a copy with full instructions in the attached document [see below]. Please note that we are not able to offer any kind of warranty for the use of this. You should read the associated notes carefully, and follow the instructions to back up your data beforehand.
What about items ordered before 1 December, but not collected until after?
The requirement differs according to how you take payment.
If payment is taken in advance (before 1 December):
According to HMRC, if you have received a payment or issued an invoice before 1 December 2008 for goods that will be provided (or services delivered) after 1 December 2008 then you can choose whether to account for VAT at the new rate of 15%. If you do, and you have already issued a VAT invoice at the old rate, you will need to issue a credit note to the customer. You do no need to tell HMRC about it.
Your choice may depend on several factors, including your Terms and Conditions, customer expectations, and what is most practical. If in this instance you decide not to account for VAT at the new rate, then you do not need to do anything. Normal VAT rules apply, the actual tax point occurs when you receive payment, and VAT is charged and accounted for at the old rate (see http://www.hmrc.gov.uk/vat/charge-transactions.htm#1)
If payment is taken after 1 December:
If payment is taken or an invoice issued after 1 December, then VAT must be charged at the rate then in force.
What should I do about refunds, returns and cancellations?
If you have to issue a refund after 1 December for a purchase made before, you must refund the full amount that was paid and account for it at the same VAT rate. Above all you must be consistent about how you account for VAT in each instance.
Are there any known issues affecting SellerDeck EPOS that result from the tax change?
There are three known problems, these will be fixed in the next release due early 2009:
For more information about the VAT change see the HM Revenue & Customs guidelines: http://www.hmrc.gov.uk/pbr2008/measure1.htm
This article is provided in good faith for the assistance of SellerDeck users. The information in it is correct to the best of our knowledge, but SellerDeck does not warrant or guarantee the information provided and cannot accept responsibility for any inaccuracy. It does not constitute general tax advice or guidance. It is your responsibility to assure yourself that your business practices conform to all mandatory regulations and requirements.
This article provides help for SellerDeck EPOS users to implement this change on their systems.
Only standard-rated sales are affected. There are no changes to sales that are zero-rated or reduced-rated for VAT, or to VAT exemptions.
When should I update my SellerDeck EPOS system with the new tax rate?
The tax change comes into force on Monday 1 December. You will need to implement any price changes between close of business on the previous working day, and opening time on the 1st.
How do I change the VAT rate in my SellerDeck EPOS system?
- First, make a backup of your .mdb and .mde files in your checkout folder before making any changes.
- Make a zread including a reset.
- Start EPOS.
- Go to the 'Sales' screen.
- Click the 'Menu (F10)' button.
- Select the 'Z Read' command from the list and click 'Ok'.
- Click 'Print' if needed a printed document on the zread and then click 'Reset'.
- Close the dialog and then close the 'Sales' screen, too.
- Modify the tax rate of Standard tax band.
- Select the 'Options' command from the 'Setup' menu.
- Go to the 'Accounting' tab.
- In the 'Sales Tax Codes' grid, locate the row with sales tax code value 'S'.
- Modify the 'TAX %' column's value from '17.5' to '15'.
- Click 'Close' to apply the changes and close the dialog.
Please note this only changes the rate at which VAT is calculated. To change the actual product prices, follow the instructions below.
Is there a quick way to update my product prices?
Unfortunately there has not been time for us to provide a fully comprehensive utility to update prices for you.
If you have Microsoft Access, we have produced a SQL query that will update prices for you. You can obtain a copy with full instructions in the attached document [see below]. Please note that we are not able to offer any kind of warranty for the use of this. You should read the associated notes carefully, and follow the instructions to back up your data beforehand.
What about items ordered before 1 December, but not collected until after?
The requirement differs according to how you take payment.
If payment is taken in advance (before 1 December):
According to HMRC, if you have received a payment or issued an invoice before 1 December 2008 for goods that will be provided (or services delivered) after 1 December 2008 then you can choose whether to account for VAT at the new rate of 15%. If you do, and you have already issued a VAT invoice at the old rate, you will need to issue a credit note to the customer. You do no need to tell HMRC about it.
Your choice may depend on several factors, including your Terms and Conditions, customer expectations, and what is most practical. If in this instance you decide not to account for VAT at the new rate, then you do not need to do anything. Normal VAT rules apply, the actual tax point occurs when you receive payment, and VAT is charged and accounted for at the old rate (see http://www.hmrc.gov.uk/vat/charge-transactions.htm#1)
If payment is taken after 1 December:
If payment is taken or an invoice issued after 1 December, then VAT must be charged at the rate then in force.
What should I do about refunds, returns and cancellations?
If you have to issue a refund after 1 December for a purchase made before, you must refund the full amount that was paid and account for it at the same VAT rate. Above all you must be consistent about how you account for VAT in each instance.
Are there any known issues affecting SellerDeck EPOS that result from the tax change?
There are three known problems, these will be fixed in the next release due early 2009:
- 'Sales Tax Rate' labels might be misleading on a few tax-related reports.
On a few reports, the value of 'Sales Tax Rate' field may be displayed inaccurately for intervals that start before 01/12/2008 and end on or after 01/12/2008. For example, if you have already zread some sales after the VAT rate modification, and run the 'Sales Tax by Tax Code' report from the 'Sales' tab on the 'Reports' dialog from 01/01/2008 to 31/12/2008, you will see '15%' in the 'Tax %' column, though sales made before 01/12/2008 had been recorded with a '17.5%' tax rate. Only the labels will be inaccurate; the net, total and sales tax values should all be correct.
Affected reports: Sales Tax by Tax Code, Sales Tax on Sales - Detailed - Orders transferred from SellerDeck Ecommerce applications
When importing orders transferred from SellerDeck Ecommerce to SellerDeck EPOS systems, if sales tax codes are not synchronised properly between the ecommerce and EPOS applications then the tax rate of order lines that have no matching sales tax code in EPOS will be set to 17.5% by default. - Tax value will be improperly calculated when adding customer payments
When you select the 'Customer Payments' command from the 'Customers' menu and display the 'Enter Customer Payments' dialog, the automatic recalculation improperly updates the 'Total', 'Net' and 'Tax' values after each modification. The 'Standard' sales tax rate is counted as if it were still 17.5%.
For more information about the VAT change see the HM Revenue & Customs guidelines: http://www.hmrc.gov.uk/pbr2008/measure1.htm
This article is provided in good faith for the assistance of SellerDeck users. The information in it is correct to the best of our knowledge, but SellerDeck does not warrant or guarantee the information provided and cannot accept responsibility for any inaccuracy. It does not constitute general tax advice or guidance. It is your responsibility to assure yourself that your business practices conform to all mandatory regulations and requirements.