Set up your first VAT period
This article explains how to set up your first VAT period in ExpensePlus for organisations that are registered for VAT.
It's really important you only enable the VAT module within ExpensePlus if your charity is registered for VAT and you have a valid UK VAT number.
Most charities do not need to register for VAT, unless they have a taxable turnover of over £90,000.
Donations, Grants, Gift Aid etc. do NOT count towards taxable turnover, so typically VAT is only applicable to charities that rent rooms, run a cafe or bookstall, or sell tickets AND the income from these activities is more than £90,000.
VAT for charities is complex, and so it's highly recommended you seek expert advice before registering for VAT.
Enable VAT module in ExpensePlus
To enable the VAT module, go to System Settings > Organisation Settings.
Then click the 'edit' button to the right of the organisation section.
In the popup that appears, enable VAT and enter your charity's VAT number.
You can only enable VAT if your charity creates accounts on an accruals basis.
Set up your first VAT period
Then, within the VAT module, you can set up your first VAT period.
Within the popup that appears, you will need to set:
- Your period start and end date
- your submission frequency (based on the frequency you have set with HMRC).
This is straightforward to do if your VAT periods are aligned with your charity's financial year.
If the VAT periods are not aligned with your charity financial year, and the period started prior to the first financial year start date within ExpensePlus, then:
- whilst you will be able to set the 'period end date' for your first VAT period within ExpensePlus to match your actual VAT period
- you will need to set the start date for the VAT period to be your financial year start date.
Then, when creating your first VAT claim within ExpensePlus, you will need to combine the data for the period from ExpensePlus with the data for the first part of the period that is outside of ExpensePlus before making your submission to HMRC.
To better understand the VAT module, please view the module overview video here.