The standard rate of VAT is currently 17.5% but it will be increased to 20% on 4^th January 2011.

See http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-increase.htm for the detailed legislative changes and effects.

In practice, the only change you will need to make in your Infor ERP Swan system is to amend the percentage rate in the Accounting System VAT rates table. You may also need to create a new code for Credit Notes, at the old rate.

Note: The VAT code should ONLY be changed prior to the start of January sales invoicing.

Thus, if you are still invoicing on the 4^th January 2011 for December despatches, then the VAT rate should not be changed until these have been completed – any such invoices must have a December tax date.

How to make the change:

1.         1. Go to Accounting System (numbered menu)

2.         2. Select Accounting System Manager

3.         3. Select System Parameters

4.         4. VAT Rates

Amend your UK VAT rate, normally VAT code 1, from 17.5% to 20%

Note: If you are likely to raise any credit notes after 4^th January 2011 against invoices raised before, i.e. at the old 17.5% rate, then these credit notes should have the old rate (see HMRC rules). In order to make this work in practice it will be easier if you create a new VAT code, we suggest 17 to make it memorable, with a rate of 17.5%. Make sure that this new code has all the same attributes as your standard VAT code, except the rate of course! Note: you may already have a VAT rate set up for 17.5% when the rate was decreased to 15% in December 2008.

Whilst in the VAT rates table, simply scroll down to the line below the last entry and press Return, enter the details as though you are copying the entry for the standard rate, but with 17.5%.

What Effect will this have in SOP and POP?

1. Any new Sales or Purchase Orders will pick up the new increased VAT rate automatically

2. Existing open Sales Orders will also pick up the correct rate when they are invoiced, so you do not need to re-enter or amend any existing orders.

3. Existing open Purchase Orders will similarly work without intervention until the Invoice Match stage where you will need to override the VAT for invoices received after 4^th January 2011 but with a December Tax point.

4. If you need to post Purchase Invoices direct to the Purchase ledger, i.e. where there is no related Purchase Order in Swan, then as for (c) above you will need to override the VAT for December invoices received after 4^th January 2011.

You can see detailed worked examples of all the various Sales and Purchase functions, including Returns in the related documents

If you are unsure of any of the above procedures,

we recommend that you thoroughly test them before applying to live.

Any further queries, please contact Infor ERP Swan support: 0121 615 8420