tax per product

[click4]

Hi,

Currently actinic adds VAT onto my total order value. Can actinic add the VAT onto each individual product and delivery charge separately? Sage adds VAT onto each product and not the total value. When we export into sage it is often a penny out. I did a search but kept getting please wait and no list of results, so forgive me if this has already been discussed (which I'm sure it has).

Many Thanks in Advance.

[leehack]

The tax rules and the settings you can have are all found on the tax tab in business settings, there you can specify your rules. I find it hard to believe that everyone else using Sage is setup like you though, sounds a little bizarre, surely sage does not have to work on a per produst basis?

[Mike Hughes]

IIRC VAT is meant to be calculated per product. I believe the correct phrase is "per unit of supply".

I'm sure I remember a test case which HMRC won where they were pursuing a tile retailer (I think) for extra VAT. I found the details here: http://www.mondaq.com/article.asp?articleid=44114

In Topps Tiles plc (Topps) the taxpayer, which did not use a retail scheme, questioned HMRC’s calculation of VAT, specifically the rounding up or down to the nearest penny for VAT calculation purposes and whether this should be on a line-by-line or ‘basket’ basis. Topps initially claimed that each single tile was a supply unit but later claimed a supply unit should comprise each separate item of merchandise, for example the purchase of, say, a certain kind of white tile and a certain type of blue would comprise two different supply units. HMRC agreed, but highlighted that this would not necessarily apply in other circumstances.

Topps argued that by rounding up VAT on any supply the taxpayer would effectively pay more VAT than required by law which would be wrong. Accordingly, VAT should always be rounded down to the nearest penny. The Tribunal agreed with HMRC that, compared to the figure calculated on the aggregate sales (no rounding), a calculation based on rounding down only would guarantee a wrong result in all cases. Mathematical rounding, however, would achieve a result as nearly accurately as possible.

So a box of tiles is a single 'unit of supply' and VAT should be applied per box and mathematical rounding should be used.

Mike