4.4.4 UK VAT
Administrator

Table of Contents

VAT Treatment allows PECOS P2P to automatically assign a Value Added Tax (VAT) rate to a requisition (or order request) line item. The VAT Treatment will be exported as part of the Order, ReceiptReturn and AP Export interfaces to allow third-party back-end systems to calculate VAT appropriately, based upon the VAT Treatment assigned to it.
VAT Treatments can be set to make code assignment fully automatic (i.e. it will not require any end-user invention). This is discussed below under ‘Assignment Defaults’. A VAT override can also be set in the user profile to allow a requisitioner or approver to manually modify the VAT Treatment.
VAT is calculated only for invoice entry and a value is not available for display on requisitions or purchase orders. VAT Treatment codes are available as criteria for Approval Plans.
To enable the UK VAT Tax Type feature, the Top-Level Administrator must set the system option ‘Multi-jurisdictional Tax’ to ‘True’. The local administrator must then assign the Tax Type ‘VAT (United Kingdom)’ in the Level 2 Organisation Maintenance > Taxation screen and create VAT codes in the Treatment section of the same screen.
Assigning UK VAT Defaults
VAT Treatment can be defaulted to a user in a number of ways, to enable the automatic application of VAT to line items.
A default rate is assigned to the top level Organisation (see  Organisation Settings > Taxation).  Category Classification or Business Rule Group default rates do not need to be available.
A default rate is assigned as part of a user’s Default Business Rule Group membership (see Creating and Editing Business Rule Groups > VAT Treatment). Category Classification default rates do not need to be available.
A default rate is assigned based on the Category Classification (UNSPSC) Code associated with a line item (see Maintain Categories > Default VAT Treatment).
A user may be allowed to manually override the default VAT Treatment if permission is granted through their user profile.
Invoice Entry
PECOS P2P will automatically calculate a value for VAT based on the rates set for each line item and includes this figure on the invoice as a Calculated VAT reference value. Supplier VAT is also entered from the supplier’s invoice and any difference between this and Calculated VAT is retained as a rounding variance.
On invoice entry the accounts payable clerk is also able to manually change the VAT Treatment.
Evaluated Receipts Settlement
Suppliers who are ERS (or Self Billing) have their invoices automatically generated upon the processing of a receipt within PECOS P2P (see Adding a Supplier). An invoice is not received from the supplier for posting and therefore no value for supplier VAT is available.
The VAT added to the system generated invoice is calculated automatically, based on the VAT treatment type associated to the requisition lines and is entered onto the invoice as Supplier VAT. This VAT total can be edited during receipt processing. Since no actual supplier VAT is entered, PECOS P2P does not calculate a VAT tolerance for ERS suppliers.