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Re: VAT Setup

On Fri, 2009-04-10 at 13:14 +0100, Adrian Chapman wrote:
> Terrissa Evans wrote:
> > So, we are setting up a new business and needing a more powerful ledger.
> > We like SQL Ledger and are looking at it now and it's default chart of
> > accounts. Would the next step be to configure Vat taxes? 
> > 
> > We are an IT Consulting business, 90% of our revenue is billable hours.
> > Should we implement VAT? 
> (presumes UK-based, by use of "VAT")
> Are you asking if your business should register for VAT, or if you 
> should set VAT up within SQL Ledger?
> If the latter, then if you're VAT registered, you need to track VAT 
> somewhere. It seems pointless to me to do it anywhere but the main ledger.
> If the former, then your accountant would be a better person to ask - 
> but my personal take would be to ask if your customers will typically be 
> VAT registered themselves. If so, then it's a no-brainer. VAT 
> registration doesn't add to your cost to the customer, but reduces your 
> costs.

I'd go along with that - registering for VAT means you can claim the VAT
back on expenses, which can be quite a lot if there's travel or fuel or
such spent. Being VAT registered also gives you a better qudos with
suppliers and customers.

If you are asking about how it works, then when setting up a customer
tick the appropriate box in the tax bit of a customer record, and the
same for services/parts. You may have to set up the rate - how to do
that is in the manual. You can then use the sales and purchases reports
to get the totals to put on the form. The overhead, once it's set up, is
minimal and is easily outweighed by the benefits.