VAT Rate Changes

How to Update VAT Inclusive Selling Prices

ℹ️ If you use VAT Exclusive Prices, you only need to reapply the VAT to calculate the Inclusive prices.

If you use VAT Inclusive Prices, you must update your Selling Prices to account for the VAT increase. There are 2 steps: 

1. Increase your Selling Prices by the VAT increase. 

2. Reapply the VAT to recalculate the profit on the prices.

1. Change the VAT Percentage in Accounting Settings if not already changed (see above).

2. Navigate to Prices (Main Menu > Items > Pricing > Menu (button) > Selling Prices).

3. Click Menu (button) > Selling Prices.

4. Select all the VAT Inclusive Prices.

   1. • Note: If you do not know whether the prices include or exclude VAT, click Field Chooser (*) and check the checkbox next to VAT.

5. Click Actions (button) > Batch Update.

6. Increase your Selling Prices by the VAT Increase so that the increase is passed on to Customers:

   1. In the dropdown list next to Update, select Selling Price by Percent. 

   2. Type 0.5 in the adjacent field. (The amount by which VAT is increasing.)

   3. Click Update (button).

   4. Confirm that you want to change the entries.

7. Reapply the VAT so that the VAT inclusive prices and margins are recalculated

   1. In the dropdown list next to Update, select VAT and fill in the adjacent fields as follows:

   2. Field 1: Select Standard as the VAT Type.

   3. Field 2: Select Inclusive (Inc).

   4. Click Update (button).

   5. Confirm that you want to change the entries.

How to Update VAT Exclusive Selling Prices

ℹ️ If you use VAT Exclusive Prices, you only need to reapply the VAT to recalculate the Inclusive Prices when viewing price lists or items. No action is needed for new transactions; they will automatically pick up the new VAT Rate.  

1. Change the VAT Percentage in Accounting Settings if not already changed (see above).

2. Navigate to Prices (Main Menu > Items > Pricing >  Menu (button) > Selling Prices).

3. Select all the VAT Exclusive Prices.

   1. 1. • Note: If you do not know whether the prices include or exclude VAT, click Field Chooser (*) and check the checkbox next to VAT.

4. Click Actions (button) > Batch Update.

   1. In the dropdown list next to Update, select VAT and fill in the adjacent fields as follows:

   2. Field 1: Select Standard as the VAT Type.

   3. Field 2: Select Exclusive (Exc).

   4. Click Update (button).

   5. Confirm that you want to change the entries.

How to Update Supplier Prices

ℹ️ As with Exclusive Selling Prices, you only need to update the VAT so that the correct VAT Inclusive amounts are displayed when you view or edit the prices. 

However, if you use Inclusive Supplier Prices, you must manually increase them by the VAT Rate increase (or ask your Suppliers for new price lists and update your prices accordingly). 

1. Change the VAT Percentage in Accounting Settings if not already changed (see above).

2. Navigate to Prices (Main Menu > Items > Pricing > Menu (button) > Supplier Prices).

3. Select all the VAT Exclusive Prices.

   1. 1. • Note: If you do not know whether the prices include or exclude VAT, click Field Chooser (*) and check the checkbox next to VAT.

4. Click Actions (button) > Batch Update.

   1. In the dropdown list next to Update, select VAT and fill in the adjacent fields as follows:

   2. Field 1: Select Standard as the VAT Type.

   3. Field 2: Select Exclusive (Exc)  (or Inclusive (Inc) if applicable).

   4. Click Update (button).

   5. Confirm that you want to change the entries.

How to Update Transactions

ℹ️ The only Transactions you need to update are those dated prior to or after the VAT changeover date that were entered before you changed the setting.

ℹ️ You could batch update Pending and Active Quotations, Sales Orders and Purchase orders. 

ℹ️ If a Supplier invoice or invoice for an Expense Payment is dated on or before 30 April, and you capture it after changing the VAT Rate to 15.5%, you must manually edit the VAT Percentage when you capture the transaction because you are not allowed to claim more VAT than you were charged.

1. Change the VAT Percentage in VAT Types if not already changed (see above).

2. Navigate to the List View of the transaction you want to change (e.g. Quotations, Sales Orders, Purchase Orders, etc.).

3. Set the applicable filters (e.g. Status: Pending and Active).

4. Click View (button).

5. Select the entries you want to change. (Use Ctrl + left click to select multiple items or Ctrl + Shift + left click to select a continuous block of entries).

6. Click Actions (button) > Batch Update.

   1. In the dropdown list next to Update, navigate to VAT and fill in the adjacent fields as follows:

      1. Field 1: Select your Standard VAT Type (e.g. Standard)  as the VAT Type.

      2. Field 2: Select Inclusive (Inc) or Exclusive (Exc). Keep the setting you usually use. 

         • Note: If you use Inclusive Prices, you must also increase the price, else your organisation will absorb the VAT Increase and have lower profit margins.

      3. Field 3: Type the new VAT percentage (e.g. 15.5).

   2. Click Update (button).

   3. Confirm that you want to change the entries.

How to View and Verify the Applicable VAT Percentage

1. Navigate to any Transaction Item List or Edit View.

2. Click the Field Chooser (*) and tick the checkbox next to VAT %.

3. The column will display the VAT % that is applicable to the transaction. 

How to Copy Transactions

1. Once you have changed the VAT percentage under VAT Types, you can copy transactions as before. 

   • Note: You can include the VAT Percentage column to check that the correct VAT is applied.

2. You may need to manually adjust the VAT Percentage back to 15% in the following cases:

   • Credit and Debit Notes.  You may need to reset the VAT Percentage to 15% so that the credit matches the invoice amount. You can use the Batch Update functionality to update multiple credit or debit notes.

   • Supplier Invoices or Expenses dated before the VAT changeover (i.e. 1 May). You may not claim 15.5% if you were only charged 15%. In this case, you will need to adjust the VAT Percentage when you enter the transaction to reflect the VAT you were charged.