Hi
What are the problems exactly?
They can all be worked around to a certain extent, it's just rough:
- Invoices are "supposed" to have for each line the exact VAT rate in
effect stated (can be a symbol which is looked up in the index, or you
can simply asterisk anything which is non-standard). The net and vat
amount for each line are supposed to be shown. Then at the bottom you
need to show net, vat for each rate in effect, and gross. In fact for
99% of common transactions the rate will always be 17.5%, but there are
some 5% goods here, and also a peculiarity of some 0% goods...
- In particular the invoicing breaks down (in SL!) if you tick the "VAT
Included" box when creating an invoice. The subtotals don't *appear* to
allow the extraction of the net subtotal figure correctly?
- The 0% thing is actually interesting because we have both goods at 0%
VAT and vat exempt items. The handling is slightly different for each
even though they are arguably the same thing... It's a historic attempt
to cheat the euro rules - basically it was required that we charge VAT
on a whole bundle of goods that we never charged VAT on before, but we
were also allowed to set the VAT rate, so we simply set a VAT rate of 0%
on them instead... It's technically not the same as being VAT exempt on
those items though...
- I think you will already cover shipping destinations as a tax calc,
but in the UK at least tax is charged solely on where the customer is
receiving the goods. Businesses are different, but this is true for
indivuals (basically delivery inside EU charge VAT, delivery outside the
EU charge nothing)
- Rounding is a pain. Suppose I agree a price of £X for something,
there are several magic numbers where when you go a penny up or down
then the total goes to £X +/- £0.01, but never exactly £X. It's a pain
to have to convert the whole invoice to "VAT Included" due to it not
quite printing correctly, simply in order to get the desired effect of
rounding to the exact amount
- Same problem when entering invoices from suppliers. For sure we can
probably chuck out the odd penny here and there, but really if the
supplier incorrectly calculates tax then we should stick in what the
supplier calculates into the system. For example I have one chap who
obviously can't use his calculator and sends me invoices where the vat
on a £20 item is often £2 out... Hard to imagine it's possible to be
that wrong, but it's impossible to enter this into the system without
using multiple transactions to straighten it all out.
The only workable solution I see to the last two points is that as per
the "Transaction" pages you have an override box for each line item
where once you tick it there is a (complicated) extra set of fields
appear which allow you to override the tax for that line item. Probably
it's a nightmare when you have lots of tax rates, but I guess most
jurisdictions have only a few in practice...? I think it's a workable
solution for the majority of countries...?
At the same time it would make sense to add fields to freeze all the VAT
and address details for a given invoice. Right now they appear to get
calculated each time and if you change something and then pull up an old
invoice and reprint it you do NOT get the old figures!! This is a
massive no no for an accounting system and I simply don't understand why
SL ever did it this way?!! The whole invoice should really be stored
and nothing ever recalculated for it...
Also I noticed that it's not easy to handle second hand sales where the
VAT is based on a margin basis, ie you pay tax only on the amount of
profit, not on the total sale price
That may pose a little problem and may require some hooks beyond what
we have. However, I wonder, what you do in the following
circumstance:
No, it's easier than that. The "Margin Scheme" is only applicable where
you have a seperate record book and specifically record each
transaction, what you bought it for, what you paid for it and serial
numbers, etc.
It's mainly designed for the motor industry, but it can be used in other
areas as well.
Probably for these transactions you wouldn't give the customer a VAT
receipt either (or else they would be figuring out your profit margin).
It's for individual, unique items (with a serial number generally), so
the manual override discussed above would solve this problem perfectly...
Thanks for listening.
Ed W
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