VAT Rate Change Process

In the event that the VAT rate happens to change, one will need to update the system to the new VAT rate.

The VAT rate changes will affect the following entries:

1. Any open debtor transactions (Invoices, Credit Notes, Journals)Journals, etc)
2. Any open creditors transactions (Purchase Orders, Goods receivedReceived notes-Notes-GRVs, Stock return notes, Journals)Journals, expenses)
3. Open Cashbooks
4. Open Expenses
5. Open General ledger journals
6. Recurring transactions  

The process to change the VAT rate is as follows:

1. Ascertain the effective date of the rate change
2. Take a system Back up
3. On the effective date of the VAT rate changechange, run the two VAT utilitiesUtilities

1. Effective date of the new VAT rate:

This will typically be published in the media. let's say the date is 1 May 2025 as an example. 

Preferably any transactions as of this date need to be finalised and process. Alternatively, transactions that are not processed, but should still have the old rate applicable, will then have to be changed to eitherback ofto the 2current new(initial) VAT typesrate.

created

2. bySystem executingback Up

Go To: System configuration>Administration>Backups

Click Create

Edit the 2ndfile name if necessary

Click Save 

3. Run VAT Utility.

Utilities

3.1 Utility 1 - VAT Update 2025 to 15.5%

Note: This utility can only be run on the effective date (1 May 2025). Running this utility before this date, will not update anything.  

Go to:  System configuration>General>VAT Tables

Click the Changed VAT drop down arrow

Select the first Utility: VAT Update 2025 to 15.5%

Click OK

Search

You will note:

1. All the VAT rates on the existing VAT TypeTypes shavehave been updated to 15.5%
2. Two new VAT types have been created: 

         a) Output VAT Sales 15%

         b) inputInput VAT - Suppliers 15%  

These 2 new VAT types will be used of any transactions that may still be open and dated prior to the 1st May.

If you had any open transactions, you will note the VAT rate would have been updated accordingly

 

2. Run Second Utility - VAT Update Documents

Select VAT Update Documents from the above drop down

Then click Run

This utility will look atfor all open documents and update the VAT value displayed on the document and search grids

A 'Done: result will be returned as the respective document type has been updated

This Utility also Updates any created recurring transactions

 

3. EditUtility Existing3 - Replace Old VAT Typescodes

Remember,This utility is used to update any open transactions that may still be dated prior to 01 May and the systemold isVAt setrate sholuld be applied

Select Replace Old VAT codes

Document Type	Select the required document type from the drop down
Old Tax Type	Select the New VAT (Updated) type with certainthe15.5% rate
New Tax Type	Select the VAT typesType asto defaultsbe for the various transactions.applied. CreatingThere awould fullhave rangebeen on2 new VAT types created with the newfirst VAT Utility.   1. Output VAT 15% for Debtors/ sales documents   2. Input VAT Supplier 15% for Creditors / Purchase Documents
Up to and Including date	This is the last date that the current or old VAT rate will entailapply; havingin this case 30th April

Click Run

This will the find any open documents dated on or before the 30th April, example invoices and change the VAT Type to updatethe15% theserate

default

Repeat settingsthis instep for all the relevantother sectionsdocument oftypes that you may have open documents for that the system'old" as15 well. If not done correctly, this could still result in the incorrect VAT% rate beingshould be applied to transactions.

As such it is safer and easier to simply edit the exiting VAT types.

Important: This step can only be done on the effective date of the new rate, before any new transactions are captured. example, if the effective date is 01 may,May, then you will need to edit these VAT types the night of the 30th April, or morning of the 1st May before any new transactions are loaded. 

 System Configuration> General> VAT Tables

Select the existing VAT type with the current rate and click edit

Change the percentage

Note:  if you have the percentage rate as part of the description, you will need to edit this as well

Save and Close

Repeat this for all the VAT types with the current VAT rate:

4.

 Run the VAT Utility

System Configuration> General> VAT Tables

Click the changed VAT dropdown

VAT Update:

This utility will update all open transactions to the new VAT rate. This saves the user from having to edit each transaction manually. if there are potentially some open transactions that are dated prior to the new rate effective date, then these entries will also be updated to the new rate. Hence you will need to run the second utility, Old VAT

Old VAT:

This utility looks at the transaction date on all open transactions and allows one to change the VAT option back to the old VAT rate

One will select the relevant documents to be updated

Enter the last day the current VAT rate applies for

Select the respective new VAT type created in step 2