Working with HMRC (UK Specific)

HMRC (short for His Majesty's Revenue and Customs) is the government body in the UK responsible for administrating, amongst other things, Value Added Tax (VAT).

In the UK, companies with a turnover above a certain level have to be registered for VAT. This means that they charge VAT (on behalf of HMRC) for products or services they sell and ultimately this has to be paid across to HMRC. Similarly, UK customers are charged VAT by UK suppliers. if you are registered for VAT this can be claimed back from HMRC.

For small businesses that do not use a system such as salesorder.com, but rather use pencil and paper, or Microsoft Excel to keep track of their business, calculating the VAT to be paid or reclaimed can be very time-consuming and prone to errors. If you get it wrong it can also be costly, since you can be fined for not paying on time or correctly.

Fortunately, if you are using salesorder.com to run your business generating accurate VAT returns can be done automatically at the click of a button. Moreover, the associated Invoice or Bill (depending on whether you need to reclaim or pay money from/to HMRC) will be generated with the VAT Return.

The HMRC Tax Authority, like a normal Supplier, keeps track of all the payments to and from HMRC. Like a Supplier, it also has a current Balance which indicates whether you owe or are owed money.

To view the HMRC Tax Authority, from the Explorer click Accounts > Tax Authorities. This will display the current list of Tax Authorities. HMRC has been added by default, and so will be listed. Simply click 'View' next to the HMRC entry. This will display the HMRC Document.

As mentioned previously. you will notice many similarities with the usual Supplier Document. From the Action Bar, you can create a new VAT Return and Find previous Returns. Also, from the 'Actions' drop-down menu, we can enter Bills, issue Invoices (e.g. VAT refunds), and make or receive arbitrary payments from HMRC.