VAT Rate Change: How to Change the Setups for Tax in the Sage 300 Database
In line with the change to the VAT rate recently announced, we are faced with the challenge of having to change the setups for Tax in the SAGE 300 database.
This change will be effective as of 01 May 2025.
In order to ensure that your financial and operational systems are compliant we have compiled a document detailing the changes for setup (Common Services>Tax Services) as well as certain procedures that would need to be followed when capturing transactions dated prior to the 01 April and therefore needs to reflect the old Vat rate.
We have tested the scenario recommended in this document and we are confident that this will ensure a smooth transition.
Our recommendation is to retain the VAT class 1, but change the percentage to 15.5%.
A lot of clients currently have a tax class relating to the old 14% tax rate (Changed in 2018) This tax class rate will be changed to 15%.
Or for clients that no longer have the original tax class,
We would then create an additional class or classes if you have capital tax with the old percentage.
This means that once the change is effected all transactions will default to tax class 1 as per the configurations of the company, however should you want to change the tax class to the old VAT percentage for backdated invoices or credits relating to invoices prior to 01/04 you would need to select the new tax class.
If the change is effected prior to 01/05 all transactions that you capture up to 01/05 will need to be captured against the new tax class (which was setup to replace tax class 1) to retain the 15%.
Please reach out to our support desk should you want to engage our services for remote/onsite assistance with this setup.
Changing the system to reflect new tax percentage
The screen shot below depicts the the location of where you would enter additional tax classes to accommodate both 14% and 15% VAT Rates.
The Tax Classes Table for Sales and Purchases is a representation of a current setup.
New Setup of the Tax Class Table for Sales and Purchases:
This table has been modified to cater for the new VAT Rate. Insert lines in this table and edit descriptions according to the screen shot
The reason for catering for both Vat Rates is for any backdated transactions or advanced billing.
The screenshot below depicts the location of where you would enter the appropriate VAT % in accordance with the new Tax Class setup.
Use the drop down arrow on the transaction type to toggle between Purchases and Sales.
Impact on Transactions
We are mindful of the fact that clients are usually concluding one month while already transacting in the new month. In a ideal scenario, we would suggest that April 2025 be concluded prior to opening the May period. This however is not always possible in the real world.
Users need to be acutely aware of having to change tax class when processing transactions for April 2025. Check and double check before posting entries in
Accounts Receivable
Accounts Payable
Order Entry
Purchase Orders
Service Manager
PJC
Norming Fixed Assets
Another note is to check your custom forms (Invoices, Credit Notes, Purchase Orders, etc) and remove mention of the 14% on forms (recommended)
Alternatively, we can create 2 reports.
- Showing the new percentage – For all transactions post 01/04.
- Showing old percentage – For all transactions prior to 01/04.
How to toggle between tax classes:
To alter the Tax Class on transactions prior to 01 May 2025:
In transaction entry screens for Accounts Receivable, Accounts Payable, Purchase Orders and Order Entry
On the transaction detail line, select Account/Tax followed by selecting the appropriate tax class to capture the VAT at 15%.
When creating credit notes, if you apply the Invoice to the Credit note then the VAT Rate from the Invoice will apply. If you do not apply the Invoice to the credit note, please amend the VAT Rate accordingly.
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