Hi, I've been looking for a way to use GNU Cash Business features with the UK Flat Rate VAT scheme. I think I've found a neat trick to get GNU Cash to take care of it in an Invoice - looking at previous emails, there doesnt seem to be a good answer anywhere.
= Summary of problem Charge the Customer at VAT Standard Rate(VSrate=20%) applied: Gross = Net + (Net * VSrate) = Net * ( 1 + VSrate ) But pay VAT at VAT Flat Rate (VFrate=14.5% for IT contractors) so Flat Rate VAT(FRV) due is: FRV = Gross * VFrate = A Solution: At first sight, I couldn't figure out how to get GNUCash Invoices to cope with this. Then I noticed the 'Discount' field. With a once-yearly calculation (or less if VAT rates don't change), calculate: * a Discount( Drate) that accounts for the difference between (Net - FRV) * a VFadj that is a percentage of ( Net + Discount ) When creating an Gnu Cash Invoice, enter a Percent Discount before Tax (<) using the following formula: Drate = -(VSrate - VFrate - ( VSrate * VFrate )) Create and use a Flat Rate VAT tax table using the following formula: VFadj = (VFrate * ( 1 + VSrate ))/(1 + VSrate - VFrate - ( VSrate * VFrate )) They look a bit daunting, but they are pretty easy to derive. Currently: VSrate = 20% = 0.2 VFrate (for IT contractors) = 14.5% = 0.145 So: Drate = -( 0.2 - 0.145 - ( 0.2 * 0.145)) = -0.026 = -2.6% VFadj = ( 0.145 * ( 1 + 0.2 )) / ( 1 + 0.2 - 0.145 - ( 0.2 * 0.145)) = 0.1695906433 = 16.959% Using these figures in an GnuCash Business Invoice, will result in 20% VAT charged to the customer Account and 14.5% VAT added to VAT liability Account. Caveat: It probably means the discount field is not usable for discounts. If anyone's interested in the proof, let me know and I post it somewhere. Regards, Chris - (could have been an Actuary - but happier as a Software Engineer) _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.