FastTrack360 Version 12 Online Help
Inclusion of VAT from Proforma Remittance in Pay Batch
- Max Ciereszko
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 when a VAT registered contractors' timesheet is paid in a pay batch, the VAT amounts that have already been calculated by the proforma remittance generation process are brought into the pay batch.
If VAT has been calculated on a payee’s earnings prior to their timesheet being paid in a pay batch, the VAT column in the payee list on the Payroll > Pay Process > Pay Batch > Pay Batch Wizard screen, which normally displays a zero value until the VAT pay batch stage, displays the calculated VAT amount from the Manual Item pay batch stage onward, as shown in the example below.
Similarly, from the Manual Items pay batch stage onward, the Totals section of the Pay Batch Wizard screen, which is displayed below the payee list, shows the total VAT that has already been calculated for all payees, who are included in the pay batch, prior to the pay batch being processed, as highlighted in the example below.
At the VAT pay batch stage, the system does not calculate VAT again for any pay items that have already had VAT calculated prior to the pay batch being processed. Instead, the system adds the VAT amounts that have been brought into the pay batch into payees' net earnings.
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. Such pay items will not have had any VAT calculated and therefore VAT is calculated at the VAT pay batch stage for such items.
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 pay batch processing efficiency because it prevents the need to recalculate VAT amounts when a timesheet is paid in a pay batch if the VAT amounts have already been calculated at the point of generating the proforma remittance when the timesheet was released for pay processing from the Interpreter.
Configuration
No configuration required.
Related pages
Classification-Public