VAT

In the UK, you usually submit a VAT Return to HM Revenue and Customs (HMRC) every 3 months. This period of time is known as your ‘accounting period’ (external link).

In the Republic of Ireland, taxable periods for VAT are usually bi-monthly, with some exceptions (external link).

The crown dependencies of Jersey, Guernsey and the Isle of Man have their own regulations (external links).

Managing VAT Periods

Each accounting period you must:

• Close the previous VAT period;
• Open a new VAT period.

Note: VAT periods must be created before transactions can be posted. The VAT period given to each transaction is determined by the tax point of that transaction. If the correct VAT period for the tax point is Active, then the transaction will post into that VAT period. If not, it will go into the next available open period.

VAT Rates

The VAT rate on different goods and services differ (external link). Each item in a catalogue will be assigned a VAT code when imported. You can also add your own items to catalogues, which includes the setting of a VAT code. Therefore, each transaction detail line can have a different VAT rate which you set according to what the product is, whether it is a good or a service, and who you are selling or buying the product to or from.

VAT rates will be set up in Horizon in conjunction with your Professional Services consultant. The VAT codes are closely linked with your catalogue import system, so changing your VAT rate configuration is not recommended, unless it is being done in conjunction with an ECI consultant or Support analyst.

If you have selected HMRC as your VAT Authority, VAT codes also have a VAT treatment which affect which boxes on your VAT return a transaction line will contribute.

Note: If your government changes VAT rates, we will publish guidance as to how to change Horizon's configuration. Do not change rates without that guidance.

What is Making Tax Digital for VAT?

Making Tax Digital for VAT requires VAT registered companies to submit their VAT return using API connected software.

Submitting a VAT Return Using Making Tax Digital.

Please read:

• FAQ – Making Tax Digital for VAT;
• FAQ – ECI Will Be Ready for the First Making Tax Digital for VAT Deadline of April 2019.

See Also