Access Accounting - Blog

Businesses Face Challenge of Fundamental Changes to Tax Point Rules

EU changes, due to come into effect from 1st January 2010, will create serious challenges for software vendors and the business community alike.  The changes dictate that if you invoice services to another EU state that you must adopt a tax point based on either the time of supply, or the time of payment, whichever is the earlier.  This means the invoice date will no longer apply. Most software applications make the assumption that your tax point date will be your invoice date by applying the 14-day rule. They work on the core accounting principle that this date is fixed and most applications will not allow you to change this date after the invoice has already been posted.

The new tax point regulations will also require changes to invoice and credit note formats, and the application of Reverse Charge VAT to these transactions which will be liable to the tax rate within the receiving country.   A further complication is that HMRC will change the format of the EC Sales List.  This will mean that any company that currently submits an EC Sales List will be affected by this change - even if they do not provide or receive services from the EU.  A large number of traders will require upgrades to their software to accommodate these changes. I would suggest that businesses think about contacting their software supplier to ensure that their solution will comply. 

The software industry, represented by BASDA, has made representations to HMRC.  These changes will affect the demands on accounts software and will clearly create an additional burden to businesses themselves (see our press release). A full announcement of the HMRC’s interpretation of the rules is expected on 22nd April – Budget day. We can only hope that common sense will prevail and sensible exemptions put in place.

Kevin Misselbrook
Customer Services Director, Access Accounting
Deputy Chairman for BASDA

Is climate change slipping down the agenda?

It was interesting to see the commitments made at the G20 summit last week and re-assuring to note that green and sustainable recovery featured amongst the six pledges made by the world leaders meeting in London. 

Counting the cost of carbon emissions

Measuring carbon emissions is a vital first step if a company is to have any hope of changing behaviour within the organisation. It’s not until we’re faced with the hard facts – together with the cost implications - that we have the drive to make changes.