Sage cannot handle new 20% VAT!!!!

[NeilStock]

Am I alone in detecting that Sage accounts software cannot handle the new 20% VAT rate?

If you are selling items at certain gross prices, e.g. £9.99 or £19.95 (and this problem occurs with every price from 15p upwards at every 6p interval!!) there is no net price that can be entered in the product details that will return the correct gross price. It will always round it incorrectly up or down by a penny, i.e. £9.75 gross, which is £8.125 net gets rounded to £9.76 which is totally useless.

The only solution is to manually enter each product line on the invoice page, enter the desired gross amount and click the calc net button - but with that much extra hassle it would probably be quicker to go back to paper accounts!!

Help does anybody know of a fix or an alternative to Sage that does not have this problem?

 

[elaine@cheapaccounting]

have you called Sage on this?

 

[NeilStock]

No I haven't called Sage in this. I refused to pay for their "Sage Cover" which I frankly think is a rip-off and as a result they refuse to take my calls.

Basically it seems that Sage Cover is just an extortionate way of providing basic customer support.

 

[johndon68]

It's because Sage 50 is set up for Net Prices rather than gross so it takes the net price 8.125, rounds to 2 decimal places (8.13) and then applies that VAT so you end up with 9.76.

Other then the method described of using Calculate Net, I don't know of an alternative. Sage 200 can handle gross or net prices but costs vastly more than Sage 50.

John

 

[Tom McClelland]

Am I alone in detecting that Sage accounts software cannot handle the new 20% VAT rate?

If you are selling items at certain gross prices, e.g. £9.99 or £19.95 (and this problem occurs with every price from 15p upwards at every 6p interval!!) there is no net price that can be entered in the product details that will return the correct gross price. It will always round it incorrectly up or down by a penny, i.e. £9.75 gross, which is £8.125 net gets rounded to £9.76 which is totally useless.

The only solution is to manually enter each product line on the invoice page, enter the desired gross amount and click the calc net button - but with that much extra hassle it would probably be quicker to go back to paper accounts!!

Help does anybody know of a fix or an alternative to Sage that does not have this problem?

This is a problem with mathematics, not with Sage per se. And it isn't specifically a problem with the 20% VAT rate either, it would happen with the 17.5% rate too, but on different gross amounts. You can only solve the problem with software that allows gross amounts to be entered for sales prices by default (the typical case with retail sales).

 

[NeilStock]

It isn't a problem with mathematics at all, it is entirely a problem with Sage and with Sage alone.

Is it really credible that the world's leading accounts software programme cannot handle products that retail at certain gross prices?

 

[elaine@cheapaccounting]

Is it really credible that the world's leading accounts software programme cannot handle products that retail at certain gross prices?

surely something that should be taken up with them

 

[NeilStock]

I have managed to speak to someone at Sage and they have no qualms in accepting that their software does have this fundamental flaw. They don't seem in the least bit bothered about it, after all you can simply go into every product line in every invoice and manually enter the gross price then hit the 'calc net' button which does give a correct result. But that is so time consuming it really would be quicker and more efficient to get out the quill and ink and roll out those parchement ledgers!! Oh and where did I put my abacus?

Their solution is for me to get a bespoke commercial package - god knows what that might cost as even they were unable to tell me but they are going to get someone to call me!!

 

[elaine@cheapaccounting]

Or just get a product fit for purpose with support that you are happy to pay for.

So many around these days.

 

[NeilStock]

"Or just get a product fit for purpose with support that you are happy to pay for.

So many around these days."

Excellent!! That's what I was asking for - so what are the alternatives that don't have this problem?

I am even happy to pay for support so long as it is to cover the cost of help when my knowledge has reached its limits rather than because the program cannot do what it is supposed to!!

 

[Optegris]

I haven't tested your problem in Quickbooks but I moved to QB from Sage years ago for similar reasons in that I found it very unwieldy.

You could take a look at QB or even an online solution like KashFlow instead.

 

[David Griffiths]

Xero has the ability to specify whether a transaction is net or gross in VAT terms. If you specify that the amounts are VAT inclusive, it works the VAT backwards from the gross

 

[David Richards]

This is a problem with mathematics, not with Sage per se. And it isn't specifically a problem with the 20% VAT rate either, it would happen with the 17.5% rate too, but on different gross amounts. You can only solve the problem with software that allows gross amounts to be entered for sales prices by default (the typical case with retail sales).

I'm with Tom; it's a mathematical rounding issue that will happen whatever the rate of VAT - but you've probably not seen it before.

For example, with 17.5% VAT, you'd see it happening for £12.99:
£11.05 + £1.93 VAT = £12.98
£11.06 + £1.94 VAT = £13.00

And when the VAT rate was 15%, you'd have seen it happening for £13.99:
£12.16 + £1.82 VAT = £13.98
£12.17 + £1.83 VAT = £14.00

Now with the VAT rate at 20%, you'll see it happening for £15.99:
£13.32 + £2.66 VAT = £15.98
£13.33 + £2.67 VAT = £16.00

It's just what happens when calculating Net + VAT = Gross - which is what all accounts programs do when working out a trade invoice.

 

[Tom McClelland]

I haven't tested your problem in Quickbooks but I moved to QB from Sage years ago for similar reasons in that I found it very unwieldy.

You could take a look at QB or even an online solution like KashFlow instead.

I've just taken a quick look, and I'm sure Duane will be along to correct me if I'm wrong, but KashFlow seems to have the same potential issue. I can't arrive at a sales invoice value of £9.75 by selling a single item @20%VAT. I always get 9.74 or 9.76. Curiously this happens even though I'm allowed to enter fractions of pennies in the sale price. Evidently the line price is being corrected to the nearest penny before adding the VAT (which is by no means an unreasonable thing to do... in fact it is probably compulsory, it is a few years since I implemented VAT software myself so my memory is sketchy).

But possibly there is a setting for gross->Net pricing in KashFlow that I've missed...

The thing to remember is that this isn't a new issue. It was around in the similar form when VAT was at 17.5% and the OP was presumably happy with Sage. It is just that the gross prices that you can reach at 20% aren't the same set of gross prices that you can reach at 17.5%. If any significant number of users found this to be a serious problem Sage would have enhanced their Line50 software to allow gross prices already.

 

[johndon68]

Evidently the line price is being corrected to the nearest penny before adding the VAT (which is by no means an unreasonable thing to do... in fact it is probably compulsory, it is a few years since I implemented VAT software myself so my memory is sketchy).

That's exactly the issue - using the example from the OP, the unit price of 8.125 (Sage allows up to 6 decimal places for an item price) is being rounded to 2 decimal places for the item totals hence the VAT being calculated on 8.13.

John

 

[David Richards]

Excellent!! That's what I was asking for - so what are the alternatives that don't have this problem?

I appreciate that you see it as a problem, but it's really about finding the software which has the specific features you need.

TASBooks can do retail VAT-inclusive pricing. You can enter different prices for each product (e.g. VAT-inclusive for retail customers and VAT-exclusive for trade customers) and choose which applies for each customer.

If you choose the VAT-inclusive pricing option, it'll be consistent whether you sell 1, 10 or 100 units. So if your selling price was £15.99 inc VAT:

1 unit would be £15.99 = £13.33 net + £2.66 VAT
10 units would be £159.90 = £133.25 net + £26.65 VAT
100 units would be £1599.00 = £1332.50 = £266.50 VAT

 

[timorley]

I don't know if this is relevant to the OP, but Sage Invoicing has a setting for "Do your sakes prices include VAT?"
If you set it to "Yes" then you can enter whatever sale-price-including-VAT you like (e.g. £19.95) and appropriate net and VAT figures will be displayed.
The setting, in Sage Invoicing, is under Business > Business Settings > VAT Settings

 

[johndon68]

Sage 50 and Instant don't have such an option.

John