Microsoft Dynamics Home > VAT Guidance Technical note about the 1st December change in the Standard Rate of VAT for Microsoft Dynamics Customers - 26th November 2008In his Pre-Budget Report on 24th November 2008 the Chancellor announced that the standard rate of VAT will be reduced to 15% on 1st December 2008. In light of this announcement, we recently issued the following guidance for Microsoft Dynamics customers and partners. ConfigurationIt is anticipated that the change to the standard rate of VAT will affect customers using the Microsoft software products.
Microsoft Dynamics AX Microsoft Dynamics GP Microsoft Dynamics NAV Microsoft Dynamics RMS Microsoft Dynamics CRM*1 Microsoft Dynamics SL*2 Older versions of Microsoft Axapta, Great Plains and Navision*3
For further details on setting up tax information, you can refer to Chapter 6 from the Microsoft Dynamics AX 2009 Financials I User Guide. For further details on setting up tax information, you can refer to Chapter 8 of the Finance in Microsoft Dynamics NAV 5.0 User Guide. Please note this procedure for changing VAT within Dynamics RMS from 17.5% to 15% is only to be applied to those items that prior to 1st December had a VAT rate of 17.5%. Do not change the rate on items to which an alternative rate applies such as zero rated items. In the Assign Item VAT wizard when you “select the items to update” select filter and then filter for items that are Tax=VAT 17.5% etc, this way you are only seeing those items that need changing.
*1 Microsoft Dynamics CRM should not be directly affected by the rate change, however care should be taken to ensure that any impacted third party custom extensions are configured to accommodate the change. *2 Users of Microsoft Dynamics SL should contact their partner *3 Customers using older versions of Dynamics products or who do not currently have a Dynamics Enhancement plan should contact Microsoft on 0845 671 1078 or email callback@microsoft.com Broader ConsiderationsBeyond accommodating the change in the VAT rate through a configuration change, it is possible that there will be broader operational considerations which you should review carefully to minimise the broader impact to your business. Consult with your Microsoft Dynamics partner who will be able to offer individual advice. For example: Stationery, document designs, forms or printed price lists which show prices or fixed references to VAT at 17.5% Management of partially completed sales or purchase orders or other transaction types which may straddle the changeover date. Impact on audit data by having one code serving 2 historic percentage rates The impact on date-sensitive VAT rate changes The need to be able to continue to transact at 17.5% after 1st December for Credit Notes, posting of older Purchase Invoices, and cash Accounting payments Interaction with other systems that integrate with your accounts software Necessity to apply VAT rate changes against Acquisition Tax and other VAT rates Impact on invoice matching routines where the expected gross value may have changed Mechanisms to allow users to review and change their pricing if using Gross prices for the retail trade and issues on price-point pricing
For further detailed information and HMRC guidance about the change, please visit the HMRC Website at: www.hmrc.gov.uk/pbr2008 |