Employing software that can make this transition smooth is essential

Colchester, UK – 12 November 2009 – Access, the recently rebranded mid-market consulting, software and solutions provider, is advising UK businesses that HMRC changes, due on 1 January 2010, could impact their profitability if not adjusted for accurately. Changes include:

•   VAT Reversal – Businesses are required to charge VAT at the rate of 17.5% on any sales of standard rated goods or services that are made on or after 1st January 2010.

•   EC Sales List – All UK VAT registered traders who supply goods to businesses registered for VAT in other EC Member States are required to provide lists of their EC supplies – these supplies are declared on an EC Sales List (ESL). Changes include: a revised format for the electronic submission; new requirement to report on sales of services and goods; a monthly requirement for a sales list; and requirement to submit the ESL within 14 days (paper submission), or 21 days (electronic submission) of the month end.

•   New Reverse Charge VAT on Services – If you buy or sell services with other businesses, within the EU, the whole process for charging, accounting, and reporting on VAT has changed. For Business to Business (B2B) transactions, the supplier will apply Reverse Charge VAT and this will need to be evident on the invoice sent to the customer. For the first time, businesses will also need to submit an EC Sales List for these services sold (previously the EC Sales List only captured goods) – the rules relating to the application of Reverse Charge VAT on services are complex. 

Kevin Misselbrook, Customer Services Director for Access, said, “Although the process to meet these changes may appear simple, businesses should consider the potential impact on areas such as retail margins if adjustments are not made to reflect the increased VAT.   Invoices, purchase orders, estimates and quotes (pre-2010), and credit issues all need to be checked against the new requirements. Making sure the entire business is feeding the correct information into the accounts system is essential. External applications, such as a web shop, EPOS system, or procurement applications, will need to be checked to ensure that the feeding system works in synergy with the changes within the core accounts system.”

To meet the HMRC requirements, Access, which provides business and accounting software to most industries, will be releasing a software upgrade for Access Dimensions at the end of November. The software is designed to be installed prior to 31st December 2009 so that all companies can be prepared for the changes in sufficient time. Access will be providing additional tools within Access Dimensions and Horizons software to enable the automatic conversion of the VAT rate on transactions created during the transitional period, to include the ESL report format changes and to apply Reverse Charge VAT functionality.

Misselbrook continued, “The new software will make the process of meeting the HMRC requirements easier and smoother, and will remove the opportunity for confusion with trading partners. Having software that can adapt to these changes will improve the transition process, but businesses should review the regulatory changes and look at their internal systems to ensure any changes required are done by 1 January 2010.”

Access is available to answer any questions for businesses; contact Kevin Misselbrook on 01206 322575. Customers can register interest in the upgrade by contacting their account manager or by running through the VAT change wizard: http://www.theaccessgroup.com/support/user-control/vat-change.aspx

For more information on Access, its consultancy and software solutions contact Gareth Evans on 01582 465 100 or visit www.theaccessgroup.com. Alternatively, keep up-to-date by following Access on twitter, www.twitter.com/theaccessgroup