Re: EU VAT

[Chris Travers <..hidden..>]

On Mon, Aug 8, 2011 at 8:34 AM, lrspares45 <..hidden..> wrote:

> Each country has it's own VAT rate, so for the UK I just set the current
> rate in taxes, and use the 'start date' for changes. This seems to work
> ok.

Ok.  What goods and services are taxable at what rates are also set by
the country, right?
>
> If sending goods to other EU countries, UK VAT is charged at the usual
> rate, unless the customer provides a VAT number, in which case the goods
> are supplied VAT-free, but sale has to be recorded on a supplemental VAT
> form.

Is this a cash-basis form like the 1099 form in the US?  or is it
accrual basis?  In other words, if you make the purchase at the end of
one year and pay for it the next year, which year do you report it on?

I ask because in LedgerSMB 1.3 we have the ability to track purchase
items that have to be recorded on a customer or vendor-specific tax
form.  Right now the only tax form supported is the US 1099 form, but
the reporting could be modified to provide similar reporting of line
items for other forms.

> This turns up if you put anything other than zero in the 'Supplies
> to other EU countries' box, which is for VAT free supplies where a VAT
> number has been supplied. I just recorded these by keeping the printed
> invoices in a separate file! Purchasing from another country I'm not
> sure about, as I never have. You can claim back the VAT paid in the
> source country if you have paid it, or you have to pay VAT at your local
> rate if you provided a VAT number to be exempted.
>
> VAT is payable every three months, i.e. quarterly. The details are here
> http://www.hmrc.gov.uk/vat/managing/returns-accounts/completing-returns.htm

Ok.  I will look at this.  One thing I would like to see us focusing
on after 1.3 RC1 is looking at this issue and what needs to be done to
make LedgerSMB better.

>
> and you should be able to down-load the form from that site.
>
> There is a flat-rate scheme for those that choose that option, details
> here
> http://www.hmrc.gov.uk/vat/managing/returns-accounts/fat-rate-returns.htm
>
> The VAT people are actually amazingly helpful, they may even send you
> assorted booklets if you ask them.
>
> Records have to be kept for 7 years (under pain of death). Errors, under
> £10,000 I think, can be sorted out using the normal form, but bigger
> ones require a call to the VAT man.
>
> People get really excited about VAT, but for most businesses it's really
> simple. Accounting software tends to present the numbers at the press of
> a button at the quarter end (nice, but not essential), but it's simple
> to do with LedgerSMB reports anyway.
>
> Goods being permanently exported out of the EU are VAT free.
>
> As far as I'm aware, all EU states work in the same way.
>
>
Helps a great deal.

Best Wishes,
Chris Travers