FreeAgent Update - Release Saint Agur
Yet more improvements from the team at FreeAgent Central:
Waiting for VAT Registration
We now correctly handle the all-too-frequent situation where you're waiting for your VAT Registration to come through. As those thoughtful people at the HMRC describe here:
You can charge VAT before you are registered but until you have a registration number you must not show VAT as a separate item on any invoice you issue. You can change your prices to include VAT and explain to any of your customers who are also registered that you will be sending them VAT invoices later. Once you have your registration number you should send the necessary invoices showing VAT within 30 days.
So that's what we do - you can set your VAT Status (Home > Company Details > VAT) to be 'Awaiting Registration' and invoices generated when you are in this state will show a unit price inflated by 17.5% to account for the VAT, but not show it separately.
An automatically-added comment states 'VAT Registration: Pending - A full VAT invoice will follow'.
Once your registration does come through, you can change your status to 'Registered' and the invoice will automatically update to show the VAT. You can then re-send it out.
Automatic VAT Rate Selection
When you're adding a Payment, you choose the category from the drop-down list. The list is already split into 'Normally VATable' and 'Zero-VAT Rated' categories, and since you're already specifying what category your payment was, we've added an 'Auto VAT' rate to the VAT Rate selection.
If you leave it at 'Auto VAT', the normal VAT rate for that category will be applied. For example, if you are explaining an airline flight as 'Travelling' (which you should), the 0% VAT Rate will be applied.
You only need manually select the VAT Rate if the VAT you paid doesn't correspond to the normal rate for that category (for example, if you buy downloadable software from the US - no VAT is paid although 17.5% would have been if it was from the UK).
Explain Transactions as Refunds
You can now explain a credit to your account as a Refund, categorising it in exactly the same way as a payment.
Auto-complete for Expense Descriptions
If you enter lots of similar expenses, you might find this useful: when you start to enter the expense description, a list of similar previous descriptions are displayed, and you can just select it (or arrow-down and tab) to use it for your new expense entry.
Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.