PO Order Tax Or Not

[chippy348]

Hi, just a quick one.

When you create a purchase order do you show the total with the VAT or net ?

Ie goods £100 total £100

OR

goods £100 Vat £20.00 Total £120.00

The reason being we have always done the later and a new system we have does not show the VAT just the net price as a total, i think it can confuse the supplier so wondered what others do.

[sgrimshaw]

Normally without VAT.

Whether VAT is charged or not, and the rate, depends on a number of factors like the VAT status of the supplier, the location of the supplier and where he ships from / to, the nature of the transaction ....

[Mr Pointy]

Surely you should show the Net Price, VAT & Total plus the VAT rate for each item, given that different items could be subject to different VAT rates?

[plasticpig]

Not sure why you would want to show VAT on a PO. VAT can be calculated on a per line basis or on a grand total of the VATable items (HMRC don't care which you do). So your PO with VAT on may not match the sales invoice that gets sent.

[SantaBarbara]

chippy348 said:

Hi, just a quick one.

When you create a purchase order do you show the total with the VAT or net ?

Ie goods £100 total £100

OR

goods £100 Vat £20.00 Total £120.00

The reason being we have always done the later and a new system we have does not show the VAT just the net price as a total, i think it can confuse the supplier so wondered what others do.

The rate of VAT may change between purchase date and delivery date.

[anonymous-user]

Always NET prices with my suppliers. Thats using SAP PS5.

[Countdown]

chippy348 said:

Hi, just a quick one.

When you create a purchase order do you show the total with the VAT or net ?

Ie goods £100 total £100

OR

goods £100 Vat £20.00 Total £120.00

The reason being we have always done the later and a new system we have does not show the VAT just the net price as a total, i think it can confuse the supplier so wondered what others do.

Is your system "off the shelf" or bespoke? If it's the latter then whoever implemented it should be able to tweak it. If it's the former then one solution is to have your PO stationery edited to show that all prices are exc VAT. Or contact the suppliers and they should be able to implement a patch or workround.

FWIW if your suppliers receive a PO that shows the nett price only either they will invoice at nett price plus VAT (in which case you're no worse off) or they will assume that's the gross price (inclusive of VAT) and invoice you accordingly (meaning you get a 17% discount

[chippy348]

Thanks all,

We have used Quick books for longer than i can recall (some 20+ years) and how that works is you set a item up with a purchase tax rate IE zero if from the Eu or Std if from the UK, like wise there is a tab for the sales tax. The up shot is when you make a PO for say a supplier from the Eu there is no VAT shown as that item is sourced from the EU.

If we set the item up with std vat rate on both the purchase description and the sales description and do a PO it shows the vat on the PO.

The new system does not show the vat either way, i guess we have just got to get used to a different way of doing things, there is option to tick box at the point of making the order but it is a bit of a faff about.

The new system is called EVOPOS and is more driven to our industry, but after 20+ years of doing it one way it is hard to change.