Prompt payment discount in UK to change from 1st April 2015

[Former Member]

Hi,

Anyone know if there is an update coming for 8.82 and above regarding changing way in which VAT is calculated on cash discount in the UK?

Currently, if cash discount is given, in the original invoice, all amounts are 100%. When the customer is paying on time to take the cash discount, they still pay full VAT. From 1st April, however, in UK the VAT will have to be calculated on the actual amount paid:

item = 100

VAT 20% = 20

standard invoice = 100 + 20 = 120

if paid on time, customer gets 10% discount.

Current situation:

10 reduction of sales price, no changes in the VAT

From 1st April 2015:

original journal needs to be corrected to reflect:

item = 100 minus 10% discount = 90

VAT 20% = 18

cash discount invoice: 90 + 18 = 108

VAT liability to be changed from 20 to 18 in addition to the correction of the sales price of the item.

Thanks!

Inge

[former_member787999]

We have a situation where we have an office in the UK and they sell to customers throughout Europe. After making the tax flag changes while everything looks ok for the UK orders/invoices for countries outside the UK they are also being impacted. Is that correct? I was told that a customer in Spain for example shouldn't have anything changed.

UK example (before config change is on the left, after on the right)

ES Example (again before change is on the left, after on the right).

Anyone else run in to this and know of a solution?

[former_member184146]

Hi,

     Vat Prompt Payment discount for UK Localisation will be released on Apr 1st 2015 .

Legal background:

VAT invoicing and accounting arrangements

when prompt payment discounts are taken up in

relation to supplies made on or after April 1, 2015.

Impact on customer/solution: Changes relating to prompt payment discounts in relation to supplies.

Changed way of businesses accounting for VAT when Company offers prompt payment discounts.

Which customers are affected by this: Approx. 15%.

--Manish

[Former Member]

Thank you Manish,

I discovered that my question crossed the latest news from SAP on legal requirements but that very clearly states TBD as release date and the current timings for upcoming patch levels aren't anywhere close to 1st April. We shall have to wait patiently for further news I'd say.

Inge

[former_member184146]

Yes Inge that's the only information is SAP has published , we have to wait for further news.

--Manish

[Former Member]

Hi, Do we have any update from SAP on the new changes? its very near now and customers are asking a solution by 1st april15.

I appreciate your help.

Thanks

Gopal

[Former Member]

Hi All,

Got the solution from SAP on UK PPD tax calculation. Below are the notes provided by SAP.

PPD OSS Note 2132596

PPD OSS Note 2133534-Change over from net to gross procedure

Thanks

Gopal