VAT Setup

Overview

In order to generate the VAT (Value Added Tax) report for any business through Surf Accounts we need to ensure that the VAT setup is being correctly.  VAT Setup should have two options and should prompt and should prompt for the following. In order the access the following choose Settings » VAT » VAT Basis. 

VAT Registration Number: Ireland is followed by seven digits and one more letter (alphanumeric) or six digits and two letters for e.g. IE1234567A or IE1Z23456A. In case or UK VAT number, the number starts with GB followed by nine digits or twelve digits (if the number represents a sub-company within a group) GB123456789. Validate that the number entered follows these rules or is blank.

Reporting period of VAT through Surf Accounts: We advise users to set up the VAT Reporting period for the   Business. The reporting option for the VAT Report you can choose the option as “Every 1 month”; “Every 2 months”; “Every 3 months”; “Every 4 months”; “Every 6 months” and “Every 12 months”. This is the frequency of the VAT Reporting period. To set up the VAT Reporting Period choose Settings » Business Settings » Financial Settings. The following screen will appear.  

VAT_Setup_Image_I.jpg

VAT Basis: This is the method which you can use to calculate the VAT for your business through Surf accounts. This has been classified into two categories as “Invoice Basis” & “Cash Basis” for both sales and purchase transactions within Surf Accounts. We recommend you to set up the “VAT Basis” after the business setup at the first place. To set up the VAT basis choose Settings » VAT » VAT Basis

Sales VAT Basis: In order to set up the VAT from the Financial Settings Surf Accounts will ask you to choose the Sales VAT Basis. This is very important in order to create the VAT report for your business. If Invoice Basis is selected then the VAT Return is based on the VAT recorded on Sales Invoices and Sales Credit Notes regardless whether they are paid or not. If Cash basis is selected then the VAT Return is based on the VAT records on Sales Invoices which have been paid. Once a VAT Return is completed this cannot be changed.

Purchase VAT Basis: In order to set up the VAT from the Financial Settings Surf Accounts will ask you to choose the Purchase VAT Basis. This is very important in order to create the VAT report for your business. If Invoice Basis is selected then the VAT Return is based on the VAT recorded on Purchase Invoices and Purchase Credit Notes regardless whether they are paid or not. If Cash basis is selected then the VAT Return is based on the VAT records on Purchase Invoices which have been paid. Once a VAT Return is completed this cannot be changed. 

Once the transaction is posted through Surf Accounts, system will not allow changing the VAT basis from Cash Basis to Invoice Basis or vice versa. For e.g. in the financial settings if VAT Basis is being chosen as Cash Basis and transaction is being posted then system will not allow change the financial settings into Invoice basis. 

Image_I

Detail illustration of VAT Basis

In Surf Accounts VAT is being calculated into 2 different methods, Invoice Basis and Cash Basis.

Invoice Basis: If the VAT calculation is being calculated on Invoice Basis, then VAT will be applied to all the Invoices you generate through Surf Accounts. Invoice Basis selection will be applicable for all the Invoices, Credit Notes, Non Customer Receipts and no-supplier payments who’s transaction date is in the range of VAT and is in the range of the VAT Return being run or who’s transaction date if before the range of the VAT return but hasn’t been included in a previous VAT return. For example an Invoice may have been posted after the November/December and updated in that case that particular transaction should appear in the January / February VAT Return.

Cash Basis: If the VAT calculation is being calculated on Cash basis, then will be applied to all the paid Invoices, Unallocated Customer Receipt, unallocated Supplier Payments, Non-customer Receipts, and non supplier payment who’s Transaction Date is in the range of the VAT Return being run or if the Transaction Date is before the range of the VAT Return and has not been included in a previous VAT Return. For example an Invoice may have posted after the November / December and updated in that case the particular transaction should appear in the January/ February VAT Return.

Key Difference between Invoice Basis and Cash Basis: VAT will be applied through Surf Accounts if “Invoice Basis” is being selected for all the Invoices (both Sales and Purchase) and Credit notes. If “Cash Basis” is being selected then VAT will only be applied in all the paid Invoice, non customer receipt, unallocated supplier payments, non-supplier payment.  

Go to top   uparrow.png

Have more questions? Submit a request

0 Comments

Article is closed for comments.
Powered by Zendesk