Box 6 values incorrect in Dynamics GP VAT Daybook VAT Return

VAT-100

There have been many annoying 'features' recently in the VAT Daybook VAT Return - in particular with the VAT Return Summary sheet.

At one point, the figures in box 6 on the summary report were simply showing zeros, even though the values were clearly showing on the sales and purchasing detail print outs.

The latest is an issue regarding Sales Order Processing (SOP) or Purchase Order Processing (POP) transactions where there are multiple lines on the transaction, and some lines with different tax treatments to others.

Obviously, if you don't use SOP or POP, or don't have the need for differing VAT treatments on the various lines on those transactions, then this won't affect you, but if you do, then this is an issue for you to know about.

So what is currently happening?

In Box 6 (Total Net Sales) of the summary report, if you have SOP or POP transactions with multiple lines, the summary report is only using the transaction amount from the first line and ignores the rest.

As far as we can tell, it believes that they are multiple VAT treatments on the same amount, rather than individual tax treatments on different amounts.

There is a work around for this that I would like to share, but only in a specific Dynamics GP Version 18.03.1200.

In this version, the audit reprint does not ignore the subsequent lines and is therefore correct. This means that you need to run the audit report first, and then run the reprint to get the correct values.

FYI: In subsequent releases of Dynamics GP, versions 18.03.1245 and later, Dynamics GP appears to have made the audit reprint report behave exactly the same as the Audit report, so this wrokaround no longer works.

So, for the time being, the version we would recommend is Dynamics GP 18.03.1200.

As a quick update, we recently tested the latest (December 2021) Dynamics GP version 18.4.1361, but it still has the same issue on box 6 of the VAT Return, where it ignores the additional VAT lines.

 

Making Tax Digital in Dynamics GP

Making Tax Digital in Dynamics GP

Most companies in the UK would have already switched onto electronic VAT submission directly from their system, but some are still using a bridge to do their submission.

As we all know, use of a bridging software (an intermediary software that submits to HMRC electronically) is supposed to come to an end soon, and if you are still stuck using it because you can't get the correct values out of Dynamics GP, then I have written this article for you based on the last few years experience we have had implementing this for our clients.

The first thing to note, is that in Dynamics GP, there are two main ways (modules) to produce a VAT Return (excluding the manual effort of doing it via the GL...):

  1. The VAT 100 Report
  2. The VAT Daybook

They are both accessed in almost identical locations in the menus.

Within the Administration area, under routines, you will find one (or both) of these menu items:

Dynamics GP VAT Return Menus

VAT 100 Report in Dynamics GP

If you are using the window below, you are using the VAT 100 module to produce your VAT Returns in Dynamics GP:

VAT 100 VAT Return in Dynamics GP

VAT Daybook Report in Dynamics GP

If you are using the window below, you are using the VAT Daybook module to produce your VAT Returns in Dynamics GP:

VAT Daybook VAT Report in Dynamics GP

Which VAT Return module is best in Dynamics GP for Making Tax Digital?

In our experience over the last few years, there is a clear winner on this question: the VAT Daybook module.

The reason for this are quite simple when you compare how the two work.

The VAT 100 Return is a rigid module that works on inbuilt rules which is pretty much a black-box. This is essentially Microsoft Dynamics GP telling you what it thinks your VAT Return should look like based on a number of factors related to, among other things, country codes on customer and supplier addresses.

If you do not have a country code on one of your customers or suppliers, transactions from those customers or suppliers will simply be ignored, regardless of whether they have a tax code assigned to the transaction or not.

If you are a company with customers only in the UK, then it is likely that adding a country code onto every address is not a high priority, as you know which country your customers are in. Similarly for suppliers.

This makes it very difficult (I would say almost impossible) to reconcile to any report you can get out of GP relating to what it should be.

Then, to make up for it, before you actually submit your return, you can just change the figures to what you think it should be, and then submit. What is the point of that?

It means that you have to do all the hard work and figure out what your VAT Return should be manually, before using a module that should do that work for you!

If you are using the VAT 100 report, then you definitely need to look at changing to the VAT Daybook report.

The reason why so many prefer using the VAT Daybook report is that you are in control of exactly what tax details should be included into each box in the VAT Return, and it works on transactions that have a tax detail assigned, and doesn't care about whether the customer or supplier has a country code on the address.

What is really good about the VAT Daybook, is that the reports provided give you complete breakdown of the transactions that are included in each box, whether they are the Tax amounts or the Net amounts, and you get the whole report summarised into the standard VAT return summary, which is what you submit to HMRC.

All you need to do on the setup side, is to specify which of your tax details you want assigned to each VAT return box. This will be different for every setup, but essentially, you will end up with something like this (which is a report print out showing the VAT Daybook Report setup):

VAT Daybook Setup Report

As you can see, you assign the tax details, and then specify whether you want to include the TAX, or the NET. Obviously, in the boxes 1-4, you will include only the TAX values, and from boxes 6 onwards, you will include only NET values, as you can see from the above report.

Once this report has been setup, you just run the VAT Daybook report and the complete set of reports are printed giving you a thoroughly complete set of auditable reports that will very easily define the contents of your VAT Return, should it ever be queried.

Furthermore, if you use separate tax codes for internal transactions, or for foreign transactions that are out of scope and are not to be included on the VAT return, then you will leave those tax codes off of the VAT Daybook Report setup. All transactions that are assigned to those tax detail codes are then displayed to your on an Exceptions report, for you to check and make sure that no entry mistakes have been made.

All in all, the VAT Daybook report is accurate, reconcilable, and gives you full control over the VAT Return, where the VAT 100 report just doesn't.

Both modules have the ability to electronically submit the returns to HMRC, although that is sometimes a difficult task too. We have spent many hours trying to get Dynamics GP to 'speak' with HMRC to submit the returns, but often it is just a difficult task that we cannot fix.

For almost all of our clients, we have implemented the Nolans Making Tax Digital module which works with the VAT Daybook module, and just works every time when submitting to HMRC.

You can check it out their VAT Submission for Making Tax Digital here...

If you need guidance on how to setup the VAT Daybook, then it is available as one of the lessons in our Dynamics GP Administration training courses or contact us directly if you would like assistance setting this up - we would be delighted to help.

If you have any questions about this post, leave us a comment below.

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