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The VAT/GST calculation for Prepayment Invoices are based on the VAT/GST Prod Posting Group of the Purch./Sales Prepayment Account setup in the General Posting Setup. Even if the VAT/GST Prod. Posting Group is changed in the PO/SO lines, VAT/GST amount for Prepayment Invoice is calculated based on the VAT/GST Prod Posting Group of the Purch./Sales Prepayment Account setup in the General Posting Setup.
The VAT/GST calculation should be based on the VAT/GST Prod. Posting Group in the PO/SO lines.
Category: General
STATUS DETAILS
Needs Votes
Ideas Administrator

Thank you for this suggestion! Currently this is not on our roadmap. We are tracking this idea and if it gathers more votes and comments we will consider it in the future. Best regards, Business Central Team

Comments

P

I totally agree with everyone here, and I am thankful I have come across this post.

I was just on a call with MS support regarding this issue and they agree and advised me to raise an idea, I am glad I found this one before I had to type it up! I have been trying to figure out ways around this, but frankly they are all suboptimal.


What would be ideal is a simple switch at General Ledger Setup (or Sales & Receivables and Purchase & Payables level) which simply is a field for something along the lines of 'Inherit VAT from Order Lines for Prepayments'. That way we get the best of both worlds.


I am working for a Partner in the UK, we have businesses in IE and UK that are needing this flexibility.

As noted by Scotty, we cannot simply set the account to ZERO, because the country will dictate how VAT should apply.


In addition, it is not feasible to make Gen Prod and VAT Prod mutually inclusive, particularly given that the Gen Prod Posting Groups 'can' be setup as default, but not mandatory and can be overridden at an Order level.


Even if multiple combinations of more granular General Product Posting Groups were a potential workaround, there would be so much risk of error in terms of overwriting the setting at the point of raising the order, not to mention that every customer I have ever dealt with does not have multiple prepayment accounts based on VAT, they, like Microsoft's own demo data simply uses one for Purchase and one for Sales, both set to STANDARD.


The MS Demo data doesn't have any prepayment accounts set at General Posting Setup level, however does include them in the Chart of Account structure? I wonder why the setup wasn't completed for this?


Please kindly expedite this request.

Category: General

P

Hi Microsoft, what the system is doing is incorrect for UK VAT legislation.


Currently, BC is using the VAT Prod Posting Group from the Prepayment G/L Account as defined in the General Posting Setup, which can be incorrect based on the Sales Order being prepared. For example, some Items may be 20% VAT and others EXEMPT (VAT Prod Posting Group) - but the Prepayment Invoice will create with the VAT Prod per the G/L Account for every line.


"An advance payment, or deposit, is a proportion of the total selling price that a customer pays before you supply them with goods or services.

The tax point will be either the date you issue a VAT invoice for the advance payment, or the date you receive the advance payment, whichever happens first.

You include the VAT due on the advance payment on your VAT Return for the period when the tax point occurs.

If the customer pays you the remaining balance before the goods are delivered or the services are performed, a further tax point is created. This will be either when you issue a VAT invoice for the balance, or when you receive payment of the balance, whichever happens first.

You then include the VAT due on the balance on the return for when the further tax point occurs."

Ref: https://www.gov.uk/guidance/vat-instalments-deposits-credit-sales


The Idea we are looking for here is that the Prepayment Invoice Lines uses the same VAT Prod Posting as per the Sales Order Lines.

Category: General

P

Thanks for posting, this is a challenge for a number of customers and limits adoption of standard functionality - so would be great if this feature was introduced!

Category: General