VAT Changes: January 2010

The following options are available to Pegasus Customers regarding the uplift in the rate of UK Standard VAT from 15% to 17.5% effective from 1 January 2010:

Opera II

Users that are currently using version 6.70.00 or later will already have the ability to Invoice at a rate of 17.5% when the Sales Order was originally created in 2009 at a rate of 15%. This is done by using the Rate 2% functionality on the relevant VAT Code.

Users that are still using versions prior to version 6.70.00 will need to consider the following:

• Upgrading Opera II to version 6.70.00 or later
• Billing all outstanding SOP documents (Quotes, Orders, Deliveries etc) before the end of 2009
• Creating a new VAT Code for UK Standard Rate VAT for both the Sales and Purchase Ledgers and then running the VAT Data Utility that was released by Pegasus in November 2008

All Opera for Windows customers will need to consider the following:

• Upgrading Opera for Windows to Opera II version 6.70.00 or later
• Billing all outstanding SOP documents (Quotes, Orders, Deliveries etc) before the end of 2009
• Creating a new VAT Code for UK Standard Rate VAT for both the Sales and Purchase Ledgers and then running the VAT Data Utility that was previously released by Pegasus in November 2008

Special Rules

If the goods are provided before the increase in VAT e.g. 22/12/2009 and then billed after the VAT increase e.g. 02/01/2010, the user can opt to apply a 15.0% VAT charge to the Invoice.

This is valid as the issue of stock was made whilst the VAT Rate was 15.0% and the Invoice was raised within 14 days of supply.

This however will not save the customer any money as a lesser amount can be reclaimed as Input Tax therefore HMRC are advising that this is an unlikely working practice.

For further details please see http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-rise-guidance.pdf