VAT Module Overview
ExpensePlus is not only a brilliant fund accounting package; it also enables charities that are registered for VAT to account for VAT and manage VAT submissions.
Warning: Unlike VAT for businesses which is often straightforward, VAT for charities can be highly complex. Typically only a proportion of VAT on expenditure can be reclaimed. It is important to calculate this correctly. So, unless you are qualified and knowledgeable about VAT, we recommend you speak to a VAT specialist for advice.
If you don't already have support and professional advice on VAT, we'd highly recommend the accountants Wyatt & Co. The VAT module in ExpensePlus will allow you to process VAT simply, however you still need expertise in VAT to submit claims correctly.
Watch this short video to learn more about the VAT Module:
When setting up the VAT module you'll be asked to enter the start date of your first VAT period. To do this you will need to pick a transition date i.e. when you want to switch from your current way you have been accounting for VAT in a separate fund to using the new VAT module.
Here is a summary of the key things you need to know:
- ExpensePlus enables you to record VAT for each transaction (where transactions are dated on or after the VAT start date)
- The VAT module enables you to check that VAT has been recorded correctly for each transaction
- The VAT module enables you to add adjustments based on the proportion of VAT that can be reclaimed (a default can be set per fund but can be adjusted per transaction)
- The VAT module enables you to download claim data in Excel format
- The VAT submission to HMRC is currently via an MTD Bridge (we can recommend a free excel add-on to enable you to do this)
FAQs relating to VAT
- Why is the VAT amount not 20% of the invoice total?
- How is VAT calculated on the Transactions by Category View?
Top Tip: If you are thinking of registering for VAT to be able to reclaim VAT on a building project and you are a church with a listed building, then you should look at the listed places of worship grant scheme. This scheme allows churches to reclaim VAT as a grant without needing to register for VAT - enabling you to get all of the benefits of VAT relief without any of the costs or complications.
If you don't already have support, we'd highly recommend getting in touch with Wyatt & Co who offer support for churches and charities and are excellent accountants.