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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, etc)
  2. Any open creditors transactions (Purchase Orders, Goods Received Notes-GRVs, Stock return notes, 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 change, run the VAT Utilities

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 back to the current (initial) VAT rate.rate using the utility.

2. System back Up

Go To: System configuration>Administration>Backups

Click Create

Edit the file name if necessary

Click Save 

3. Run VAT Utilities

3.1 Utility 1 - VAT Update 2025 to 15.5%

Note:Important: This utilitystep can only be rundone on the effective date (1of the new rate, before any new transactions are captured. example, if the effective date is 01 May, then you will need to edit these VAT types the night of the 30th April, or morning of the 1st May 2025). Running this utility before thisany date,new willtransactions notare updateloaded. 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%

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Click OK

You will note:

  1. All the VAT rates on the existing VAT Types have been updated to 15.5%
  2. Existing VAT types with 0% VAT rate will not be affected
  3. Two new VAT types have been created:created with the 15% rate: 

a)

Output VAT - Sales 15%

 This VAT b)Type will be used for any debtor / Sales transactions that the 15% VAT rate should apply to.
Input VAT - SuppliersSupplier 15%This VAT Type will be used for any Creditors transactions, GRVs, RTS & expenses that the 15%

VAT rate should be applied to 

TheseEssentially, these 2 new VAT types will be used of any open transactions that may still be open andare dated prior to the 1st01 May.

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2. Run Second Utility - VAT Update Documents

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Select VAT Update Documents from the above drop down

Then click Run

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

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

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This Utility also Updates any created recurring transactions

3. Utility 3 - Replace Old VAT codes

This utility is used to update any open transactions that may still be dated prior to 01 May and the old VAtVAT rate sholuld15% should be applied

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Select Replace Old VAT codes

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Document Type Select the required document type from the drop down
Old Tax Type Select the New VAT (Updated) type with the15.5% rate 
New Tax Type

Select the VAT Type to be applied.

There would have been 2 new VAT types created with the first 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 apply; in this case 30th April

Click Run

This will the find any open documents for the respective document type selected on the above screen dated on or before the 30th April, example invoices and change the VAT Type and the VAT rate to the15% raterate.

Repeat this step for all the other document types that you may have open documents for that the 'old" 15 %15% rate should be applied to

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, 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. 

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

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