AccountsPortal Help Documentation

Tax Status

This setting is required for all organisations which report VAT, GST or Sales/Purchases Tax to a local tax authority.

AccountsPortal allows you to define the name of your Sales and Purchases Tax in the Financial Settings of your organisation. For the sake of simplicity, the help document refers to the tax as VAT. The application will correctly reflect the name you define though which might be VAT, GST, Sales Tax or anything of your choosing.

PLEASE READ CAREFULLY:

Changes made to this part of the application can significantly affect your data. If you are unsure, speak to your Accountant first.

If you know your Tax Status for VAT is going to change on a certain date, then you should create the new status well in advance of that date, and prior to entering new transactions.

If the Organisation is already tax registered, and you are changing to a different VAT scheme or Accounting Basis, we advise where possible, that you arrange with the tax authorities for the new status to be valid from the beginning of a new period/month. This will greatly reduce the complexity of checking the values of the VAT Report before and after the change of status.

If the tax status for the Organisation has changed, then a New Tax Status should be entered and saved, rather than editing the existing status.

If a new Tax Status is created, any existing transactions with a transaction date on or after the 'Valid From Date' will need to be opened and resaved to pick up the new Tax Status. For invoices and credit notes, this requires opening and resaving at least one line item in each transaction. This step is extremely important as the Tax Status is set in the transaction and referenced during creation of the VAT Report. Alternatively, you can void/delete these existing transactions and re-enter them. Note that extra steps are required for invoices/credit notes that have already been paid:

• View the relevant paid invoice. Right-click on the Payment link and open the bank transaction in a new browser tab.
• If the bank transaction is Reconciled, unreconcile it as per https://www.accountsportal.com/docs/item/215546843
• Change the Type in the bank transaction to General and assign to Conversion Suspense account.
• Go back to the invoice view. Refresh the browser.
• Edit and save any line item in the invoice to get the Tax Status updated.
• Go back to the bank transaction and reassign it to the invoice.
• Mark bank transaction as reconciled if required.

Also note that if you have already saved a VAT Report covering the validity period of the new Tax Status, then you will need to delete this report before updating the transactions.

Add or Edit Tax Status

To add a new Tax Status, or edit an existing status, perform the following steps:

• Click the Settings tab, and then Tax Status.
• If you have previously entered a Tax Status, then this will be shown in the list; otherwise the list will be empty.
• To add a new status, click the 'Add New Tax Status' button.
• To edit an existing status, click the relevant row from the displayed list.
• From the resulting popup enter or amend the following information.  
  • Valid From Date: Enter the date upon which the VAT status became active.
  • VAT/GST/Tax Scheme: Choose Standard Rate, Flat rate (only for UK) or Not Registered, if you are deregistering.
  • Flat Rate (%): If the Organisation is Flat rate registered, then a flat rate % will also be required. These are usually industry specific and can be found on your tax authority's website.
  • Accounting Basis: Choose Accrual Accounting or Cash Accounting from the drop down list. A simple explanation of the difference is that Accrual Accounting results in VAT being recognised based on the invoice or credit note date whereas Cash Accounting results in the tax being recognised on the date that the invoices are paid or credit notes refunded.
  • Reporting Frequency: Choose Monthly, Quarterly or Yearly from the drop down list.
  • Notes: Enter any other optional information.
• Click the Save button.