VAT Conversion

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How to change from a VAT Not Applicable system to a VAT System.

 

If you did not charge VAT and you want to change it to a VAT applicable system.

 

Step 1.

Set the Supplier as registered for VAT

Go to Supplier > Lookup, open the Supplier Main Form. On the General Tab, Select the VAT Registered checkbox

 

Step 2.

Go to Stock > Extended Stock Lookup.

On the Stock Lookup Tab, click the Select All Visible button (or select the items you want to change).

On the Global Changes Tab:

 VAT on Purchases, select Input Tax

 VAT on Sales, select Output Tax Standard Rate

 

 Fixed Price Preserve Incl./Excl. - Select which price you want to preserve. Example: In the current system your exclusive and Inclusive price is the same, say $90. If you select inclusive then the exclusive price will be changed to $78.94.

 

Click on the Change Selected button.

 

Step 3.

Go to Company > Data Health and Maintenance and click on the Convert Stock To VAT button.

Your average cost and supplier list price will now be changed to Value / 1.14.

 

From an accounting side you must consult your accountant or tax practitioner.

a) You must put in a VAT claim for your stock on hand. Please take note of your registration date. If not, you are going to lose the 14%.

b) You must claim back the VAT on capital goods like equipment,  delivery vehicles etc., again please consult your accountant.

 

See also the Tax Setup chapter if you want to change the VAT %