Tax/VAT
What would it take for you guys to add the ability to add tax/VAT?
What I would need is the ability to mark a customer as needing to pay tax/VAT on all his/her payments. This tax would be applied as a percentage of all payments, and included on the invoices/receipts.
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Support Staff 1 Posted by Marc Guyer on 09 Apr, 2010 03:38 PM
Our first question is whether this is a necessary feature for CG to implement. A primary goal of CG from the beginning is simplicity and is why separate tax is not part of the current product. That said, it may be a necessary feature addition. What pain would this alleviate for you?
2 Posted by Joel Moss on 09 Apr, 2010 03:50 PM
Well here in the UK, it is a legal requirement that the amount of VAT
payable/paid is detailed on the receipt/invoice. I would expect it to be
pretty simple to add the ability to add a percentage increase to all
payments for certain customers.
Support Staff 3 Posted by Marc Guyer on 09 Apr, 2010 04:06 PM
Well that answers that question. There's certainly several more. We're happy to implement the feature. We're going to need to research this but we'd also appreciate continued discussion with you on the requirements for VAT.
Is VAT required for every line item or can/should it be turned on/off for an individual line item? Is the percentage different for different goods/services? Does VAT apply to only some customers or to all? Is it geographically dependent?
4 Posted by Joel Moss on 09 Apr, 2010 04:51 PM
VAT is the same for all: 17.5%, but that should be editable, as the
government could change the rate at any time. ALthough not likely.
Only need the VAT amount shown for the total invoice amount. So not need to
be shown for each line item.
VAT only applies to UK and EU customers. ANyone outside those areas do not
pay VAT. Anycustomer who supplies a VAT number, also do not pay VAT.
Basically, all we should be able to do is mark a customer as having to pay
VAT, and the rate. Then all subsequent payments for that given customer will
be charged at that rate. I can't vouch for other Taxes, but it may also be
useful to mark any given charge/payment as tax due.
Support Staff 5 Posted by Marc Guyer on 12 Apr, 2010 01:12 AM
That certainly makes it quite simple. So, a quick and dirty requirements list:
Does that sound about right?
6 Posted by Christian Eaton on 13 May, 2010 01:33 PM
Yes, that sounds correct, but you'd also want "2" to enable opt-out based on geography, e.g. non-EU customers don't have to pay the tax in the case of UK VAT.
7 Posted by Andrew on 17 Jun, 2010 08:58 AM
Actually, in the UK there are special VAT rules for what are called "electronically supplied services". More info here - http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebAp...?nfpb=true&pageLabel=pageVAT_ShowContent&id=HMCE_CL_000925&propertyType=document. I've created a process flow diagram showing how this works so get in touch if you want a copy.
Support Staff 8 Posted by Marc Guyer on 17 Jun, 2010 12:59 PM
Andrew -- We're close to implementing VAT capabilities. We'd be grateful for any input you're able to provide.
9 Posted by Andrew Rogoff on 17 Jun, 2010 01:35 PM
Hi Marc
That's great news! We're building a web app soon and would love to use a service like yours. The VAT rules are a real pain and I've copied and pasted my notes on the rules as far as I understand them. We will provide software as a service so we would be classified as "electronically supplied services". I'm also attaching a process flow diagram which you may find useful. I've spoken to the VAT people and they say the diagram reflects the rules. They use the word "belong" and you can find details of what they mean by this at the URLs listed below.
http://blog.boxedice.com/2009/11/09/uk-vat-rules-for-softwaresaas-companies/
Hope this helps!
Cheers, Andrew
10 Posted by Antoine on 17 Jun, 2010 01:59 PM
Hi,
In France we have the same requirements as described above for the UK. We need to charge VAT on an invoice or receipt for a customer. Rate in France in 19.6%, not likely to change...
Available to provide further information if needed.
All the best
Support Staff 11 Posted by Marc Guyer on 17 Jun, 2010 02:20 PM
Andrew -- That is great stuff! We'll definitely work that into our dev process. Thanks!
12 Posted by Christian Eaton on 18 Jun, 2010 01:58 PM
Couple of comments:
1) Whilst changes to the rate of VAT are rare, they should be provided for e.g. the UK briefly went to 15% rather than 17.5% for a period last year. The VAT to charge on invoices depended on the rate set at the date of that invoice, e.g. even if people payed after the rate had changed they still paid what they were invoiced (AFAIK). Therefore the VAT rate used should be saved with each invoice rather than just linking to a saved variable - although this could be used to remember the current rate.
2) I may be missing something, but Andrew's link to the UK HMRC website doesn't seem to actually contain any "supplementary information" on "Electronically supplied services" apart from mentioning that they exist in the title? Is the VAT rate different, or is the differentiation simply one of who to charge and who not to charge VAT to (as per your flowchart)? Having bought software (to download) from European suppliers as a VAT registered UK company I have managed to enter our EU VAT number and avoid the unnecessary taxation.
Looking forward to Cheddar solving these problems for us! :o)
C.
13 Posted by Andrew on 19 Jun, 2010 03:55 PM
Hi, sorry, here's the link relating to "electronically supplied services":
http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebAp...?nfpb=true&pageLabel=pageVAT_ShowContent&id=HMCE_CL_000902&propertyType=document
The rate of VAT is not different but there are special rules relating to where the customer "belongs". We need to "identify the status and location of a customer in order to determine their place of supply".
They also say "As technology cannot determine with certainty the place where such customers belong, self-declaration by the customer combined with a reasonable level of verification will be acceptable." I suppose you could use geo-location services to satisfy the "reasonable level of verification" requirement (or maybe the location of their credit card?). It's all pretty bureaucratic isn't it!
14 Posted by neil.middleton on 09 Sep, 2010 01:51 PM
Are there any updates to this? We have two apps lined up, both of which require VAT support.
15 Posted by Christian Eaton on 09 Sep, 2010 02:50 PM
+1 ... we're getting close with our latest webapp for the UK market and would love to use Cheddar rather than having to roll our own.
Support Staff 16 Posted by Marc Guyer on 09 Sep, 2010 04:26 PM
Handling for VAT wouldn't be too much of a problem. We're in the middle of some other projects at the moment, however. What are your respective timelines for this need?
17 Posted by neil.middleton on 09 Sep, 2010 04:42 PM
One app is fairly immediate - one is a couple of months away.
We can sort of workaround VAT by doing some fruity maths on the numbers we
can get from the API, but there is a lot of consequences such as not being
able to send out nice emails with VAT itemised etc. It would really be a
problem if VAT wasn't supported.
18 Posted by Pedro Carvalho on 09 Sep, 2010 07:05 PM
+1
In Portugal we have the exact same needs.
Support Staff 19 Posted by Marc Guyer on 09 Sep, 2010 09:11 PM
I got a wild hair and pretty much whipped this up this afternoon.
I'll need to get the team to run it through QA, run regression tests, write some docs and deploy but that shouldn't take too long. It is off schedule, however. Once deployed, I'll ask you guys to take a look and let us know what you think of the feature. There may be some tweaks based on your feedback.
20 Posted by neil.middleton on 09 Sep, 2010 09:15 PM
Awesome, happy to help wherever possible. Thanks.
21 Posted by Pedro Carvalho on 09 Sep, 2010 09:20 PM
Great! count me in to help on this
Support Staff 22 Posted by Marc Guyer on 14 Sep, 2010 09:05 PM
Ok, this is now available. Here's some documentation:
http://support.cheddargetter.com/faqs/operational-how-tos/vat-support
The API doc has also been updated as noted in the above FAQ.
Please let us know what you think via this thread.
23 Posted by Andrew on 14 Sep, 2010 09:44 PM
Brilliant - thanks! Now we just need to build our web app! :)
24 Posted by Pedro Carvalho on 15 Sep, 2010 02:31 PM
Good job. Simple to use and comes in perfect timing for us :)
25 Posted by neil.middleton on 15 Sep, 2010 04:47 PM
Small bug - it appears that if we post a VAT number, CG will not allow us to mark a user as NOT vat exempt.
This causes an issue as we (but not everyone) want to charge VAT on every account, and leave the customer to claim it back. The reason for this is that otherwise we need to validate every single VAT number as a valid, current, EU number before continuing - which is a pain.
Could it be changed so that if we posted a VAT number, and a Vat Exempt of zero that CG would respect this? At the moment it appears to be overwriting what we're posting in.
26 Posted by Chris Eaton on 15 Sep, 2010 05:55 PM
Surely you should be able to post the VAT number but then un-check the "VAT
Exempt" checkbox? This should be the behaviour.
Having said that, why would you want to post the VAT number at all if you're
not going to use it? E.g. the "solution" in your case, if you're charging
everyone VAT then don't save the client's VAT number?
Chris
Support Staff 27 Posted by Marc Guyer on 15 Sep, 2010 09:28 PM
Chris -- I agree and disagree. You make a great point -- "...why would you want to post the VAT number at all if you're not going to use it?" On those same lines, why would you need to un-check "VAT Exempt" if you're not using the "VAT Number"?
Certainly if there is a compelling use case for providing the number and flagging a customer as "not exempt", we'll change the behavior.
28 Posted by Pedro Carvalho on 15 Sep, 2010 10:38 PM
The behaviour should be as Chris said.
1) all customers in our own country (EU member) pay VAT. If the customer is a company, we need to state its VAT number in the invoice. In this case, we need a VAT number and the customer is not exempt
2) if customer is a company outside our country, but inside European Union and the company enters a valid VAT number, then it is VAT exempt
Turning off the constraint of having a VAT number makes the customer exempt, it will cover all cases.
Support Staff 29 Posted by Marc Guyer on 16 Sep, 2010 07:36 PM
Ok -- We've deployed a change which maintains exemption status whether a VAT number is provided or not. In other words, the two settings, VAT Exempt and VAT Number, are independent.
30 Posted by neil.middleton on 16 Sep, 2010 07:43 PM
Cheers Marc
Marc Guyer closed this discussion on 16 Sep, 2010 08:19 PM.
Marc Guyer re-opened this discussion on 16 Sep, 2010 08:19 PM