In the Chancellor’s summer statement on 8th July 2020, he shared the government’s plans to change UK VAT from 20% to 5% for the Hospitality and Tourism sectors. This change will come into effect from Wednesday 15th July 2020 and run through until 12th January 2021. As part of the government’s plan to help restart the economy and support businesses most impacted as a result of the coronavirus pandemic, the VAT change will see support offered to dedicated sectors within the UK.
For full details of the changes directly from HMRC, please click here to visit the .gov website.
What does this mean for your business and your Sage solution?
In your accounting solution, this means that some transactions that you would normally record at 20% VAT may now be at a reduced rate of 5%.
Below is some guidance for Sage 200 and Sage 50 customers:
Sage 50 Accounts
Create a new tax code to represent the temporary 5% VAT rate; making it simpler to identify transactions you’re entering during this temporary reduced VAT rate period for reconciliation and analysis purposes.
Update any outstanding orders and invoices on or after 15th July
Update tax codes stored within the customer, supplier, and product records.
For a full list of recommendations and to access additional guidance, please click here to visit the Sage 50cloud VAT Change Hub.
Create a new VAT code to represent the temporary 5% VAT rate.
Update the default VAT code for Stock Items (if applicable)
Update outstanding invoices, credits, and orders, plus any recurring items.
For a full list of recommendations and to access additional guidance for Sage 200cloud Professional and Sage 200cloud Standard, please click here to visit the Sage 200cloud VAT Change Hub.
If you require any further assistance, simply email our support team or contact us here.