The following Vat rules are available in CALIQ:
Rule | Description | Sales Rule | Appears in Box
| Purchase Rule | Appears in Box |
1 | UK - VAT Chargeable | Y | 1,6 | Y | 4,7 |
2 | EC VAT - Goods & Related Services | Y | 6,8 |
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3 | EC VAT - Services | Y | 6,8 |
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4 | EC VAT - Triangulation | Y | 6,8 |
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5 | Export to/Import from Non - EC Country | Y | 6 | Y | 7 |
6 | Exempt | Y | 6 | Y | 7 |
7 | UK Sale - Zero Rate By Certificate | Y | 6 |
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8 | Distance Selling - Supply to non-registered EC trader | Y | 1,6 |
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9 | EC Acquisition Tax - Goods & Related Services |
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| Y | 2,4,7,9 |
10 | EC Acquisition Tax - Services Only |
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| Y | 2,4,7,9 |
11 | EC Acquisition Tax - Triangulation |
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| Y | 2,4,7,9 |
12 | Reverse Charge Tax ROW | Y | 4,7,1,6 | ||
13 | Zero Rated | Y | 6 | Y | 7 |
14 | Outside The Scope | Y | 10 | Y | 10 |
| 15 | Postponed VAT on Imported Goods (PVA) | Y | 1,4,7 | ||
| 16 | Domestic Reverse Charge (CIS) | Y | 6 | Y | 1,4,7 |
Since the VAT rule is attached to an address, the EC Country Code set for the address does have an impact on the available VAT rule. Every country within the EU has an EC Country Code and you would normally set the code according to the country on the address. There is an additional code, OE – Outside EC, which should be used for all other countries.
Sales (Output VAT)
The VAT rules to be used for sales are set up in the Regime Rules function, found in Finance Desk VAT. They will be consulted every time an invoice is raised via demand desk sales and applied accordingly. They are affected by where the goods is delivered to, if the trading partner is VAT registered and the classification of the items being sold, found under Process Rules, Sales Rules in resource maintenance. Generally you would expect to see one of the following rules used:
- Country code is GB, i.e. this is an address in the United Kingdom – 1, 6, 13, 14 and 16.
- Country code is one of the EU states – 2, 3, 4, 7, 8, 12, 13 and 14. After Brexit, rule 13, Zero Rated, is the one generally in use when selling from the UK.
- Country code is OE, Rest of the world – 1, 5, 6, 13 and 14.
A sales invoice raised via an event in Demand Desk will use the VAT rule derived from the delivery address on the event, using the EC Country Code, VAT Number and Classification of the items being sold (found under Process Rules, Sales Rules in resource maintenance).
For a VAT rule that is not ‘exempt’ from VAT (i.e. at least one of the vat rates for the rule is set to something different from zero), the actual VAT rule and percentage rate used come from the resource being sold unless the customer VAT rule is 'exempt'.
If an invoice is raised via Sales Ledger Transaction desk, it is assumed it is raised on the main accounts address and you can select from the VAT rules available for that address.
Domestic Reverse Charge (CIS)
This rule can be used when Invoicing goods and services when both Supplier and Customer are registered under the CIS (Construction) scheme.
Purchases (Input VAT)
The VAT rule to use for a supplier is set for each supplier in the Process Rules section, together with the EC Country Code and the VAT number. Depending on the EC Country Code selected, the following VAT rules are available:
- Country code is GB, i.e. this is an address in the United Kingdom – 1, 6, 12, 13, 14 and 15.
- Country code is one of the EU states – 1, 6, 9, 10, 11, 12, 13, 15 and 16.
- Country code is OE, Rest of the world – 1, 5, 6, 12, 13, 14, 15 and 16.
Purchase invoices, whether they come via Invoice Approval or as a manual entry in Purchase Ledger Transaction desk, will pick up the available VAT rules according to the main address for the supplier.
A notional VAT amount is calculated for VAT Rules 9 and 12 and written to the VAT audit table. The rate used is the current standard rate for rule 1, UK VAT Chargeable. This is also true for rules 15 and 16. No actual VAT should be posted for these transactions.
Reverse Charge VAT (rule 12)
The Reverse Charge VAT moves the responsibility for the reporting of a VAT transaction from the seller to the buyer of a good or service. When a transaction is subject to Reverse Charge, the recipient of the goods or services reports both their purchase (input VAT) and the supplier's sale (output VAT) in their VAT return.
You are now able to set a Suppliers VAT rule to Reverse Charge VAT in Caliq. When you post a Purchase Invoice/Credit (without VAT) the system will calculate what the VAT charge would be and adds this to the Vat Return. Boxes 1, 4, 6 & 7 are all updated with Reverse Charge Transactions. The net effect on the VAT return is zero.
Nominal VAT Journals
Regarding VAT journals, if a net amount is posted or not depends on the journal type you select.
If you select type 4 (NLCVJ - VAT Output Adjustment Journal) or type 5 (NLDVJ - VAT Input Adjustment Journal) the Net Amount fields are set to zero. The VAT amount itself is picked up from the journal detail line entered for the VAT Payable or VAT Reclaimable nominal code, using the VAT rule defined.
If you select type 6 (NLCVJ - VAT Output Journal) or type 7 (NLDVJ - VAT Input Journal) the VAT amount is picked up the same as for journal types 4 and 5. The Net Amount is calculated as the total of the rest of the detail lines which are not assigned to the VAT control account and have the same sign as the entry for the VAT control account.
For more information on this, please see article https://support.caliq.com/a/solutions/articles/44000901158?lang=en.
Outside The Scope
These transactions never go on the VAT return but you can enquire on them by using the extra button 10 in the Caliq VAT Return function.