VAT split – sales that contain the product price and service in one price.

VAT split – sales that contain the product price and service in one price.

What is VAT Split/Bundle sale, and how it works

A situation when an invoice contains only the hearing aids, but the price of those hearing aids consists of the hearing aids as well as the cost of the service. The Hearing Aid price must have VAT calculated from it.

The service part does not.

Here is an example:


 

Single hearing Aid costs in this example 1 750 GPB

788.02 – Is the price of the hearing aid and that part should be subject to VAT

961.98 – is the value of the service added to the Hearing Aid and should be VAT exempt.

In this example above, the system is already set up to calculate the values correctly.

As you can see in this part, the system only calculated a 20% VAT from the Taxable Goods amount instead of the wholesale. (We are assuming that VAT was already in the Hearing Aid price)

 


 

How VAT split works:

 In Manage, the system will look at Product Catalog and values in Vat Split on the Product page:


Manage will then calculate the VAT based on the values entered here. The values are added per product separately.

 

How to calculate VAT split:

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E.g. previous example:

The full price of the hearing aid on the invoice (including VAT) is: 1 750

The Taxable amount (the hearing aid specifically) is 961.98

If we divide the taxable amount by the full amount: 961.98/1750 = 0.5497

If setting up manually within the product catalog, we need to give the system % values, so we have to multiply the result by 100%:

0,5497*100% = 54,97%

Direct value when using Product catalog import templates:


 

How to set up VAT split in the Product Catalog

Manually:

You can set the VAT split manually in the system by going to Inventory/Product Catalog and finding your hearing aid. Once you open it in Edit More the fields for VAT split are available:

The taxable % goes into the Standard rate field:


 

Import template:

Go to Inventory/Product Catalog and use the Import/Export button to generate an Excel spreadsheet for each category to which the VAT split would apply (e.g., Hearing Aids, Accessories, RIC Receivers, etc.


Services would never apply as those are VAT-exempt.)


 

Once the template is generated, open it (it most probably is in downloads)


 

Go to the last two columns on the left and put in the calculated VAT values.


 

The sum of both those columns has to be one like in this example:

0,5497+0,4503=1

 

Sometimes, rounding will affect the values, and the sum will end up being, for example, 1,003. So it’s important the values are verified, as the system will reject an import if there is an error of this sort.

Once all values are put into the spreadsheet, please make sure that the format of all cells is ‘text.’



 

 

How do you get reports on VAT splits – taxable and exempt amounts?

Reports/Sales/All Sales will show the taxable goods and VAT exempt values.

 
You can export those to Excel using this button:
 

How to adjust print templates for VAT Split 

When using VAT Split, you might also want to adjust your Print templates to not show the VAT Exempt and Taxable Goods on the printout and only show the final calculated VAT.
What you will need to remove is the following data from all print templates: (I will use Invoice to Patient as an example)

Environment Settings/Print Settings/Printing templates/Invoice to Patient:

 
Those fields have to be deleted:

Then click on the payerProductSaleTaxes.TaxCode field:
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On the right side of the screen, press the function button:

And then select the three dots in the Text field:
 
In the following screen, delete everything after the tax Code] part
 
This is how it should look after you delete it:
 
Press Apply first, then OK

Save template!
What it will look like is like this when you print it out:
 
It only shows the final calculated VAT clearly.