Reverse charge VAT

*You will need to be running at least Protean FR1.5 version 7.4.4685

SALES

A new system setting within Config > General > Settings has been added called ‘Use Reverse Charge VAT’ (Y/N) that exposes the new features below.

Tax Set Up
A new option has been added in the VAT Codes form to ‘link’ your ‘Reverse Charge VAT Code’ in Sage (or other accounts system) to a Rate in Protean. Sage suggest creating a T20 (zero-rated) and link it to T1 for example)

A new checkbox has been added to the Accounts Tab (Jobs section) on the Customer record called ‘Reverse Charge VAT’ that users can manually tick/untick on a customer by customer basis. The default is unticked. This will act as a default value for any jobs created for this customer.

Similarly, a new checkbox has been added to Invoicing Tab on the Job form called ‘Reverse Charge VAT Applies’ that users can manually tick/untick on a job by job basis. This is defaulted from the Customer (as above)

Similar checkboxes are also in place on Sales Orders, Hire Contracts & Hire Extras
When invoicing a job ,order or contract flagged in this way:
• An updated invoice layout shows the VAT rate & values as normal but they are not included in the invoice total
• The output to the Accounts System uses the new ‘Rev Chg Code’ specified in Tax Codes (above) for this invoice & VAT value would be £0.

*Please note if you require reverse charge VAT for sales you will need your documents updating to show the required text of ‘Customer to pay VAT to HMRC‘ Please contact the support team where we will advise further on how to do this.

PURCHASES

A new checkbox has been added to the Accounts Tab on the Supplier record called ‘Reverse Charge VAT’. Default is unchecked. This is to act as a default value and be inherited down to any Purchase Invoices entered for this Supplier.

On a Purchase Invoice we have added a checkbox to the header called ‘Reverse Charge VAT Applies’ which is defaulted from the Supplier option. (to act as default for this invoice but can be changed per line item)
(Note that the PI will not have VAT listed on the invoice but will state ‘Reverse Charge VAT applies’).
A new checkbox has been added to the ‘Tax’ view on each line of the Purchase Invoice Matching screen so that individual elements of an invoice can be flagged/unflagged as falling under this rule as needed.

If checked by user then on accounts output:
• Input VAT remains at the normal rates and input accounting remains as it currently is.
• Additionally, the same amount of tax is to be included in Output tax (ie the sales side of the VAT return), so the net effect is zero.