We are pleased to announce that from November 2021, Farmplan Business Cloud contains the option to split out Zero and Exempt VAT so that partial exemption VAT calculations can be made.
If you have been using Farmplan Business Cloud before November 2021, you will have noticed that zero and exempt VAT were allocated to the same tax code. To extract the details needed for the de minimus calculation it is now possible to allocate zero and exempt VAT separately.
For full details of how Partial Exempt VAT is calculated in Farmplan Business Cloud please read VAT - Partial Exemption.
Edit Transactions already entered
You will notice that any transactions that had been previously allocated to EX, have been updated to show Z against them instead.
NOTE – if you do not calculate partial VAT, it is not necessary to make any changes as both Zero (Z) and Exempt (EX) are treated in the same way on the VAT return.
However if this is applicable to your business you will want to amend any transactions that should be Exempt (EX).
Go to Accounts – View Transactions.
Use the Advanced Search to help you filter the list – for example you may wish to see all the entries against a particular category such as rent income.
Select all relevant entries and then go to the Edit Checked button at the bottom of the screen.
This will allow you to edit the tax code from Z to EX for all the selected entries. See also Bulk Editor.
You may also wish to change some of the expenses to P (Partial VAT) or P1 (Irrecoverable VAT)
Edit Categories
You should also review the default tax code that has been allocated to each category. These have not been amended by the system so you should go through each one to make sure that the default tax code is the one that you require.
Go to Accounting – Categories
Use the pencil symbol against each category to change the default tax code. You should check each category that is Zero or Exempt. You may also wish to allocate P (Partial VAT) or P1 (Irrecoverable VAT) against particular expense categories.
Bank Rules
Remember to check any bank rules that have been created previously and ensure that they have the correct VAT status attributed to them. See Banking - Bank Rules.
For more details of how to operate Partial Exemption please see VAT - Partial Exemption.