It is of vital important that each business ensures their tax recording is accurate, to avoid inadvertent penalties from the government.
Last updated 04 May 2023
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Introduction
This article will highlight all of the elements of Kobas where tax is defined and how you can update these records.
Kobas holds tax rates on your outgoings (stock purchases, and payroll) and incomings (sales revenue). We display different tax figures throughout our system, and provide certain tax information through integrations.
There are certain events that can occur which mean that you will need to undertake administration around your tax within Kobas, such as national rate changes or if your company registers or de-registers for VAT.
Top Tip: If you are not a VAT registered company, you will need to ensure all ingredients and EPoS Items are set to Zero rate for VAT.
Receipts
If you are a VAT registered business, you have to be able to provide a VAT number and breakdown for items you sell at retail on request. Therefore, completing your VAT number in Administration > Venues > Venue Details > Sales & Marketing is a compulsory field. This will then display on your receipts.
Tax Rates
We currently support all UK (or Irish and Spanish, depending on your locale) tax rates. In some places, we use the T-Codes used by popular accounting software systems.
- T0 (Zero) - VAT charged at 0%
- T1 (Standard) - VAT charged at 20%
- T5 (Reduced) - VAT charged at 5%
- T9 (Exempt) - No VAT charged
Food and drink for human consumption are often zero rated when supplied by a retailer. But food and drink are usually standard rated for VAT when provided as part of a catering service. Meals and drinks served hot or consumed in a café or restaurant are often standard rated. But some cold or takeaway food and drinks can be zero rated. There are lots of exceptions.
Warning: This information here is demonstrative and used to explain how intricate the UK Tax system is. Example information is provided to illustrate how to use our system. We strongly recommend you take appropriate financial advice on tax for your business. Kobas cannot be held responsible for incorrect tax returns based on information we provide around tax rates.
Terminology
- Gross - Values marked as Gross are inclusive of VAT, ie. the full retail price.
- Net - Values marked as Net do not include VAT.
Suppliers as Petty Cash
When you set up suppliers in Kobas, and you select as a supplier available to you as a Petty Cash expense, you will need to define a VAT rate. This is used to filter into the Cash Log.
The set up screen also asks you to set whether the Prices on delivery notes from this supplier are Net, Gross and Net or that there are none. This allows your operational and finance staff to reconcile the delivery note quicker, by reducing human inputting error.
Stock Ingredients and Deliveries
Ingredient cost prices used in the Manage Ingredient page should be Net.
When accepting a delivery, the cost can be edited. This does edit the master record for that ingredient. Please remember to keep the price as a Net figure.
You'll see the overall total box(es) at the top to help reconcile the delivery note, based on the supplier setting noted above.
EPoS Items
The VAT that you charge on an item is dictated solely by the VAT rate associated with the EPoS Item. This is irrelevant of any Recipes or Modifiers associated with that EPoS Item. EPoS Items can hold a different VAT rate for each consumption mode (Eat in, takeaway or delivery) and these can be viewed and edited in two places.
In the EPoS Item master record
This is accessed by going to EPoS > Item (PLU) Manager > Edit, and looking at the top right hand side.
You can make changes to the tax rates here and press save.
In bulk in the Item Manager
This is accessed by going to EPoS > Item (PLU) Manager > Edit All EPoS Items. You can filter the page by menus, tax rates, categories and free text search:
You can then see the price and tax rate for each of the three consumption modes. You can simply change by editing the drop down option and pressing save. You can also edit every item in that view by pressing the wand icon at the top of the relevant VAT column.
Top Tip: This bulk VAT editing tool is perfect for VAT rate changes made by the government.
Reports and Integrations
Kobas has a complex reporting suite that provides you with different insights into your business, and tax rates are used and excluded in various reports. These are clearly explained by the information included on the screen or in i-bubbles on the page.
The Cash Log report exposes tax information intended for VAT returns:
- VAT on Sales - Sales relates to services or products provided, and this is the VAT associated with them.
- VAT on Payments - Payments are the payments received for the above Sales. Payments can be before the sale (deposits) or after (tab credit). This would be the VAT associated with Payments made in that period.
The Cash Log is also the basis of the formatted exports for Sage and VT+, as well as the Xero Integration. Therefore the same data that is displayed in the cash log is sent via these integrations to your accounting software.
The Stock Audit Trail Transactions report also exposes the deliveries that have been accepted and as such displays VAT information. This is also exportable to your accounting software.