For building and construction services, changes may need to be made in your software and accounts packages. Clik Service has some features added in update v4.335 that will help you prepare for the changes.
Have a look below to see what features are in place and how to use them in Clik Service.
What is the Domestic Reverse Charge?
The VAT domestic reverse charge is a Government initiative applying to the way VAT is handled for building and construction services.
This comes in effect from the 1st of March 2021, for more information, please see the Gov website.
What We’ve Done
To help those affected by the changes, we’ve implemented changes in Clik Service to make it easy to manage and display domestic reverse charges on your invoices.
Additions include:
- Template tags to display the domestic reverse charge on invoice templates
- Standard invoice template with domestic reverse charge
- Support for the Xero & Sage reverse charge codes
- Invoice tax codes
Let’s have a look at what each of these means for Clik Service users and what you need to do to make sure you are ready for the changes.
VAT Codes and Invoice Templates
In update 335, we have included new VAT codes for the domestic reverse charge:
- T21 -Domestic VAT Reverse Charge 20%
- T26 – Domestic VAT Reverse Charge Reduced 5%
Not only have we included these two new VAT codes for you to add to your invoices, but we’ve also added an invoice template with the appropriate codes included.
Templates can be a big part of any process in Clik Service. Invoice templates help you get work invoiced quickly so you can take the stress out of the sales process.
The new standard template will provide the information needed to demonstrate the domestic reverse charge applied to your invoices. So you don’t need to enter the same information on your invoices over and over again.
How to use Domestic Reverse Charge in Clik Service
The good news is that if you need to make changes to the way you handle VAT, Clik Service makes it easy.
You might need to update your existing invoice templates that will require domestic reverse charge going forward. Once edited, new invoices will have the charge applied, with a note to make customers or suppliers aware.
Perhaps you already have an invoice created that needs to include the domestic reverse charge. You can easily change the tax code under the times or materials that apply to the domestic reverse charge rules.
If you have customers or suppliers that always require domestic reverse charge to be applied to their financials, you can also update their tax code. This will then set the default code that will be added to each item on an invoice for that customer or supplier.
Accounting Integrations
But what else needs to be done to adjust to the changes?
Refer to your accounts package to see what relevant steps you will need to make.
If you are a Xero user, you will need to make sure you have applied the domestic reverse charge tax rates in your account. Once that has been added, you can sync the two new tax codes in Clik Service.
Sage users may also need to set up the relevant tax codes. If you have the CIS module, the tax codes will already be set up in Sage in Clik. If you don’t have the CIS module, then make sure to add the tax codes in Clik Service and refer to Sage to set up the correct tax codes.
Further reading:
Clik Service support:
- Invoice templates for domestic reverse charge [Video]
- Applying domestic reverse charge tax codes
- Applying domestic reverse charge to credit notes
- Updating tax codes for Xero
- Updating tax codes for Sage
- Updating tax codes for QuickBook
- Changing tax codes for customers & suppliers
