Description
An enhancement has been made in this release to facilitate the ability for VAT to be calculated on contractors' earnings when proforma remittance documents are generated at the point when interpreted timesheets are released from pay processing from the Interpreter. In line with this change, the pay batch process in the Payroll UK module has been enhanced so that at the VAT stage, the system will bring in any VAT amounts that have already been calculated as part of the proforma remittance generation process instead of recalculating those amounts again.
When a contractor is paid in a pay batch, manual pay items can be added to the contractor’s earnings at the Manual Items pay batch stage. However, in a pay batch, the system references the payee validity period that corresponds to the timesheet period to determine if the payee is VAT registered and therefore if VAT is to be calculated and the VAT rate that is to apply.
By contrast, when a proforma remittance document is generated, the system refers to the date on which the document is generated to determine if the contractor is VAT registered and the VAT rate that is applicable on that date. That is because for the proforma remittance to be deemed a valid tax invoice, the issue date and therefore the tax point must be the date that the remittance is issued.
Because of the different periods that are referenced, there can be infrequent situations where, for example, the payee’s VAT registration status or the VAT rate has changed from one period to the next so VAT may not be calculated on the manual items paid in the pay batch or may be calculated using a different rate to timesheet items for which VAT had been calculated when the proforma remittance was generated.
Benefits
This enhancement improves the efficiency of the VAT pay batch stage by preventing the need to recalculate VAT amounts for pay items where the VAT amount has already been calculated as part of the proforma remittance generation process.
Configuration
No configuration required.