How is VAT calculated on the Transactions by Category View?

This article explains how you can view details of VAT submissions in ExpensePlus and how VAT is calculated on the Transactions by Category View.

What is the Transactions by Category view?

When creating and viewing a specific VAT submission, the Transactions by Category view is a helpful way to check that VAT has been entered correctly for each of the transactions within the claim.

To get to this view, click on the relevant submission (either from the VAT screen or from the view completed submissions screen).

Once you're on the relevant VAT submission, click the 3rd tab at the top, called 'Transactions by Category'.

This is an alternative / in addition to being able to check transactions on the Transactions by VAT Rate view, and you can easily switch between these two views at the top of the VAT return screen.

Similarly, you can also toggle at the top of the screen between viewing:

• Income transactions (sales & other outputs)
• Expenditure transactions (purchases & other inputs)

Single fund / category purchases

For purchases recorded against a single fund / category, the Subtotal, VAT rate and VAT amount will exactly match the details that were entered.

Split fund / category purchases, where a regular VAT rate has been used

For purchases recorded against multiple funds / categories where the VAT rate is set to '20%', '5%', '0%', 'Exempt' or 'N/A (outside the scope of VAT)' the Subtotal, VAT rate and VAT amount will also exactly match the details that were entered, and the VAT amount will be correctly split

The VAT amount for each fund / category is calculated using the same split as the expenditure amounts.

For example

A purchase is split with £50 of the expenditure recorded to the Travel category, and £150 to the Training category (a ratio of 1:3).

The VAT for this purchase is therefore split in the same 1:3 ratio on the VAT Return - Transactions by Category View screen.

Split fund / category purchases - where a custom VAT amount has been entered

This becomes more complicated when purchases are split over multiple funds/categories AND where the VAT rate has been custom set.

This is because there is no guarantee that it's correct to split the VAT amount in the same ratio as the expenditure has been allocated.

However, splitting using the same methodology is still the best way for ExpensePlus to do this.

Typically this is unlikely to cause an issue.

It's typically purchases of food (e.g. Tesco receipts) that tend to have custom VAT - and with these the amounts involved (and therefore the possible variance) are likely to be smaller.

Example of an issue

The issue with custom amounts could result in a larger variance if, for example, you were sent an invoice for a conference venue and you've recorded the room hire element to one fund / category and this is not VAT-able, and recorded the refreshments element to a different fund / category and this is VAT-able. In this scenario, ExpensePlus would split the overall custom VAT amount between the funds / categories, whereas it of course all relates to just one of the funds/categories.

In rare cases where this is the case, during the VAT adjustment step in creating a VAT submission, you will be able to over-ride the VAT amount to be recharged to each fund / category to correct for this.

There is no need to worry about correcting for this on the VAT return - Transactions by Category View screen. The information on this view won't affect your VAT return which is done at purchase level (not fund / category level).

To better understand the VAT module, please view the module overview video here.