Change in VAT question :)

craggle87

Hi Everyone, I have a question relating to the change in VAT rate. Any help would be appreciated. Due to the change I am just wondering how to raise an invoice.

We train school children in cycling and in 2010 we invoiced for 400 pupils at £40 p/p, at 17.5%. It's now 2011 and i've been told this figure has dropped to 380 pupils and i need to incorporate the adjustment (-20) into our latest figures on a invoice dated March 2011. How shall I list and account for the VAT now that it is at 20%?

I would be very grateful for your thoughts.

Thanks
Craig

coojee

I'd be inclined to do a credit note for the 20 children if it's already been invoiced. Sounds to me like they want to avoid the VAT by asking you to re invoice it. Just a thought, has the training already taken place and when did it happen?

Monsoon

I would also issue a credit note for the value of 20 pupils at 17.5% (credit note VAT rate same as VAT rate on invoice to which it relates).

craggle87

Hi, Thanks for your reply. Yes the training took place in Nov/Dec 2010. If I issue the credit will i have to date it as 31st December when the rate was 17.5%? I'm just wondering if they will allow that now that we are 2-3 months on.

Cheers

Monsoon

No you date it when you raise it. The VAT rate follows that of the rate of the invoice to which it relates, even if you raise the credit on a date where the rate is different.

Jan

Just be careful if usig such as sage and you have altered T1 to 20% as it will automatically work it out at that rate!

Monsoon

Good point. I only have one client on Sage and I've got T10 set up as 17.5% and T11 set up as 15% so if I have to post a transaction for a prior VAT rate I just use that code instead of T1 which is now set to 20%.