Tax Changes in Dynamics (GP)
This is a quick re working of the advice we put together last time the VAT changed from 17.5 to 15%. This change is being reversed in January 2010 so now would be a good time to start thinking about how this might effect your systems. The changes in VAT where originally set out in the Chancellors PBR on the 24th November 2008. Because of the nature of Tax calculations in Dynamics (GP) this article is intended purely as a Guide and you will need to choose the appropriate actions for your circumstances.
Note: We have kept these notes fairly generic as we have clients on several different versions, however in version 10 where we give a path to Setup>company etc these are found under Tools> setup > Company
Originally we advised that everyone will need to set up a new set of tax details to replace the 17.5% details currently used. We recommended that you did not simply change the rate on your existing detail as this could cause you reporting problems and issues when trying to post back.
To set up a new Tax detail you need to go to Setup>Company>Tax details
You needed to set up a minimum of two details, one for sales and one for purchasing. This needed to be done in each of your companies.
If you followed this advice you should now still have your original 17.5% tax codes to which you can now revert in January.
Here you have Two choices.
Option 1: We advised that you could retain the existing Tax schedule and simply remove the 17.5% detail from this schedule. Then add the new 15% detail to the schedule and to the ALL Sales and ALL purchasing schedules that you have setup on the company. Schedules can be accessed from setup>Company>Tax Schedules. This has the advantage of not then needing to change any setup on classes , debtors, creditors , items or projects. Simply put where ever the old 17.5% detail appears in a schedule on its own (No other details)you will need to replace it with the 15% detail and wherever it appears with other details you will need to add in the 15% detail. If you took this option then it is simply a matter of swapping the details back.
Option 2: is to setup two new Tax schedule (one sales one purchasing). Again this is done through setup>company>Tax schedules. Once these have been crested you will also need to add the 15% Tax detail to the existing All sales and All Purchasing tax schedules. However if you create a new schedule you will need to change all the card records within dynamics that have a schedule attached. These are Debtor maintenance, Creditor Maintenance, Item maintenance, Cards project categories, SOP setup options default tax schedules , and the appropriate Classes for all of the above , this will also need to be done in each company. If you took this option then you will need re allocate the ols schedules to classes etc and role down the changes.
VAT Reporting and Vat input and Output codes
Originally we advised, If you are using the standard Vat reporting within Dynamics (GP) this all works off of Tax detail ID so if you have created a new detail there should be no issues. However some of our clients are reporting directly off of the GL account code. If this is the case you will need to setup two new GL accounts for the new tax rate (input and output accounts)and add these accounts into the new details you have created.
Setup new accounts under cards >Financial>Accounts remember it will need to be a balance sheet account.
The Account can be associated with the Tax detail Setup>Company>Tax detail id.
You may wish to do this even if not reporting directly of the GL. If you followed these instructions you will need to change the account code back.
Sales Order Processing
SOP will cause some issues as any outstanding transactions created this week will retain their 15% tax detail when transferred to invoice (This is not a problem for POP as this recalculates). The Tax setup options for SOP are on the options Tab of the Sales Order setup window found under Setup>Sales> Sales order processing. To get round this issue you will need to go back and change the tax on the order to the new rate before transferring to invoice.
Nolan’s Advanced VAT
We have spoken to Nolan’s and they are issuing no specific advise however like us they are advising to create new details rather than update existing ones. These are found in the same place as the standard Tax details as these are alternate windows.
Note: if using Nolan’s advanced VAT you can set an account to be Taxable, in which case a tax schedule is held against the account as well as an individual Tax ID , these will need to be changed as well where they are using the 15% tax detail. These are accessed under cards>financial>Account .
Depending on how your projects are setup , you may need to change the tax schedules on Cards> Projects> cost category.
Further Advice from the Government
For further detailed information and HMRC guidance about the original change, please visit the HMRC Website at http://www.hmrc.gov.uk/pbr2008/
Advice has yet to be issued on the upcoming change in January 2010
No advice has been issued by Microsoft at this time , but when they do we will update you.
If you have any questions please contact the email@example.com