Many of you will already be aware that in March of this year, HMRC introduced a new way to manage VAT with a 'VAT reverse charge'. If you'd like to read about exactly when and how it's mandated that you use this function, you can have a look at the government website here.
Commusoft have had this on our radar since it was initially announced. We made sure that the system would be prepared to deal with this change and any effects that this may have on the functionality of Commusoft itself. However, as this is an integration with another software package, we also require that they have made the neccessary updates to allow the integration to work as intended with reverse VAT.
Currently, VAT reverse charge is supported for the following accounting integrations:
- Xero ✅
- QuickBooks Online ✅
- Sage Accounting ✅
- FreeAgent ✅
We are in communication with all of our integration partners and will continue to keep everyone in the know as they update their software to support the reverse VAT option in Commusoft.
How it works
When creating customer or supplier invoices, you will now have the option (as well as the existing 0%, 5%, 20%) to use a VAT reverse charge. As mentioned on the website, this is similar to a 0% rate of VAT, with the difference that you will not be paying anything to HMRC or reclaiming anything either. Quite simply, when a reverse charge is applied, the recipient of the service/goods makes a declaration for both their purchase and their suppliers sale, effectively cancelling one another out.
We've modified Commusoft to include this additional VAT option - you will see it in our dropdown menus when you are invoicing and deciding on the correct VAT to apply.