Comments on: VAT: some late nights ahead for software vendors

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By: Pre-Budget Report and VAT: the story that won’t die | AccMan

Pre-Budget Report and VAT: the story that won’t die | AccMan — Thu, 27 Nov 2008 02:08:50 +0000

[...] When I wrote about an admittedly narrow issue on how I see the impact of the reduction in VAT from 17.5% to 15% I could not have foreseen how that story would take on a life of its own. But elsewhere. Over at IT counts, I riffed the story with the added twist of noting Dave Turner’s comments about the large high street retailers. [...]

By: Andrew Mulvenna

Andrew Mulvenna — Tue, 25 Nov 2008 20:28:06 +0000

We are running an on-line survey to ask all our clients, accountant partners and contacts what do they really want to do about the new VAT rate...Results will be published Friday 10am GMT on our VAT rate information page.Andrew Pearl

By: Mark Davies

Mark Davies — Tue, 25 Nov 2008 19:17:52 +0000

This is another nail in the coffin for traditional software! It must be causing a nightmare for accountants and bookkeepers who can’t be 100% certain of what their clients are doing without a visit. I spoke to a business advisor this morning who was fretting about his clients and had been emailing them all with instructions to help them set up their accounting software. He didn’t know much about online accounting until we spoke, and was enthralled by the prospect of being able to log on and check that clients have changed their VAT rate setting or do it for them.

(Small trumpet blow…) We’ve already told all of our users what to do via the in-built messaging system in e-conomic and we’ll have an announcement on the web site news page tomorrow – it’s pretty simple: They just change the global rate settings for sales and purchases from 17.5 to 15. Which takes less than 30 secs.

I expect more confusion as people fully realise the implications of producing a VAT return based on a mix of invoices at two different rates of VAT. Maybe not an issue in some cases, but if companies are using the Flat Rate Scheme, and even more so if they are using the Cash-based method, they need to be certain that they use the appropriate flat rate according to the rate of VAT on the invoice. Payments received in Dec/Jan/Feb (etc.) will almost certainly cover invoices at both rates. Unless their accounting system helps them (and, yes, I’m saying this safe in the knowledge that ours does), businesses are going to incur hundreds of pounds in additional administration time, IT consultancy and accountancy fees making sure that they get it right.

By: Chris Tanner

Chris Tanner — Tue, 25 Nov 2008 10:34:59 +0000

It’s up to us, the software vendors, to make life easy. There are going to be enough other things for business owners to get their head around over the next few weeks… The main software issues are going to be in ecommerce packages rather than accounting systems. Ecommerce packages are two-a-penny, and many don’t have powerful price changing capability – expect to see a lot of nice friendly 99p prices disappearing when the site manager just decides to change the inbuilt tax rate and leave it at that.

For information on the Pearl system, see here

By: alastair

alastair — Tue, 25 Nov 2008 09:15:41 +0000

Give us a chance to draw breath! this was announced yesterday afternoon!! Don’t think this is a software issue – more concerned to understand the legal position – particularly as I work for a business that makes exempt supplies.