Setting Up & Using VAT Partial Exemption in Sage Intacct
The partial exemption feature in Sage Intacct helps you to mark items that are eligible for VAT partial exemption, so the system calculates the recoverable and non-recoverable portions for you.
In this tip of the week, we’ll show you how to enable partial exemption in Sage Intacct. We’ll also run through how this looks when entering transactions into the system.
(Click the images to expand for easier viewing.)
Setting up Partial Exemption in Sage Intacct
In Sage Intacct, navigate to: Company > Entities, find your UK VAT solution and click ‘Edit’.
Note: this feature can apply for other exemptions, such as the RITC in Australia and ITC in Canada.
Scroll to the bottom of the screen until you find the section named ‘Partial exemption’.
Tick ‘Enable partial exemption’, select an account from the ‘Unrecoverable tax account’ dropdown list and enter the ‘Effective date’ and ‘Percent value’.
You can add a new line with an effective date and percent value as your VAT rate changes if needed.
Once you’ve completed your changes, press ‘Save’.
Once that’s configured, you can start to use partial exemption when entering transactions and Sage Intacct will manage the postings in the system.
Here’s an example using the above setup:
Purchase invoice £1,000 + £200 VAT (20% Standard Rate)
Posting:
- CR PLCA £1,200.00
- DR Purchases £1,000.00
- DR VAT Liability £150.00
- DR Unrecoverable VAT £50.00
Entering Partially Exempt Transactions in Sage Intacct
In this example, we’ll show how it’ll look when you’re entering a purchase invoice.
Navigate to: Accounts Payable > AP purchase invoices.
In this example we’ll simply click ‘Edit’ on an existing purchase invoice.
Scroll down to ‘Entries’.
Note that we’ve ticked the ‘Partly exempt’ checkbox.
On the ‘Posting details’ tab you can see how the VAT has been split out.
It has been set up to split the VAT to 2 different places, so it’ll show 2 different places on the journal and when you run a General Ledger report.
Press the highlighted text in the ‘Journal no.’ column to see the journal entry.
Here’s what the journal entry looks like. As you can see, we’ve got the tax receivable account on the journal entry.
For more help with Sage Intacct, contact support if you’re an existing customer. Alternatively, complete the enquiry form to talk to our team about the services we offer.
