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A value added tax (VAT) is a form of consumption tax. So, VAT from the perspective of the buyer is a tax on the purchase price, while from the perspective of the seller, it is a tax on the value added to a product or service. In general, VAT should be paid on the sale of all goods and services, unless revenue is excluded or exempt from VAT in accordance with the VAT act. Businesses must also have a turnover above a certain size to be taxable. Read more about who and what is taxable at www.hmrc.gov.uk (external link).
The majority of settings for VAT in Mamut Business Software are defined when you select that the company is VAT registered in the wizard for creation of the company database. Here you can also select the number of VAT periods for your company. Then you just need to enter the individual preferences for customers, suppliers and products before you can start to register orders and purchases within the system. You can read more about this in Getting started with VAT.
These settings form the basis for VAT implementation in your accounts, in that VAT will automatically be entered into the right account when registering orders/invoices and purchases. In addition, the VAT periods will automatically be closed in connection with the end of the accounting period, and in the process the value of the VAT to be paid (or reclaimed) will be posted to the VAT Liability account and the VAT return will automatically be printed.
Getting started with VAT
Companies that are exempt from VAT
About the VAT register
Closing and reporting VAT periods
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