On 21 February 2018, the National Treasury has announced that the Value Added Tax (VAT) rate will increase from 14% to 15%, effective from 1 April 2018.

Fincon Accounting has the ability to manage this change already built-in. Please follow the following guidelines on how to handle the changing of the VAT rate:

What needs to happen is as follows:
  1. The current VAT rate has to be changed to 15%; and
  2. A new VAT code has to be created for VAT at 14%.
Why the need to create a new VAT code for the old VAT rate?

Even though the VAT rate is changing to 15% on 1 April 2018, chances are that you are going to run into a situation where you need to credit an invoice or debit a GRV that was made using VAT at 14%. Instead of writing the invoice or GRV back at 15% percent (and unjustly benefitting or penalising yourself), you will use the VAT code for VAT at 14%.

NOTE: This has to happen right after the month-end procedures of March 2018, before trading starts for April 2018.

Perform the following steps in Fincon Accounting, on any workstation currently working on Fincon:
  1. Click the System menu item.
  2. Click the Tax Codes menu item.
  3. Change the rate of the current code 1 VAT to 15% for both Input Tax and Output Tax.
  4. Create a new VAT code for VAT at 14%, using the same ledger accounts as the code at 15%.
  5. Click the Accept button.
  6. Check that a new dialogue box appeared with the following message: The tax codes have been updated successfully.
  7. Click the OK button.
Here are some additional points to bear in mind:

The Fincon Team
012 663 7567