4 Reasons to Update VAT Rates on Your EPOS System
“You’re probably familiar with the acronym GIGO, or in full, Garbage In Garbage Out. Till systems are only as good as the information programmed in.
So if the prices and groups or categories of menu items and till buttons are not regularly updated, then it simply will not work effectively.
Especially over the coming months make sure you keep your EPOS system match fit by updating VAT rates.”
– Duncan Colvin, Head of Compliance, Venners
Why your EPOS system needs VAT rate updates
When the lower rate of VAT was first introduced for food and soft drinks, not all operators saw the benefit of adjusting their EPOS system, believing in part, that the reduced rate would be temporary.
With the chancellor now confirming that the VAT rates are to change twice before April 2022 it is crucial that your EPOS systems are kept up to date. Now is the moment to ensure the correct VAT rate is applied to all your products and report grouping of items is appropriate.
There is good reason to invest time in this process. Not only can it save you money it can improve your stock controls, stock reporting and analysis.
Here is a quick guide of what to look out for:
1. Apply the correct rate
For some businesses, the till system is the main source of revenue reporting. If a business is using the till system to report net sales into the VAT return it is vital that they are aware of the net sales volume at 5%, 12.5% or 20% to avoid inadvertently paying too much or too little VAT.
2. Receipts for customers
These should be reporting VAT correctly to avoid any business customers falling foul by overclaiming VAT on a meal, based on the information supplied in your receipt. Worse still as the rate rises to 12.5% in the autumn, underclaiming the tax.
The rate bands should be clear and separated. It may sway a business customer to book a table if they are confident the receipt will not raise any questions on their expenses.
3. Tidy up Stock Categories
With both food and soft drinks rated at 5.0%, many operators have been tempted to add all minerals and soft drinks into the food category of their EPOS. This may be a quick fix but it can complicate accurate stock reporting and quick analysis of costs against sales.
Ensure that minerals and soft drinks are within the liquor reports but with the lower rate applied, maybe held in a separate section. This again will assist in clear revenue and item sales reporting to your stocktaker allowing for more accurate analysis of your stock results and monthly and yearly comparisons to remain precise.
When completing a full stocktake, your auditor should be looking to balance the revenue reports to the till. Clear categories with correctly assigned VAT will help balance cash taken to till sales.
4. Combination sales
Be sure that your till system is correctly splitting any promotion buttons that you may have programmed in. Does a Gin & Tonic promotion record the two separately?
Consider reducing the Gin price by the promotional discount rather than the Tonic to take full advantage of the VAT rate difference.
Reopening stock and compliance checks
Time spent now checking through these elements will ensure that your revenue and stock control reporting is as accurate as possible. Prior to reopening all your sites it is imperative that all your systems are set up as they should be, to avoid the aforementioned pitfalls.
Venners’ compliance team are able to do a detailed reopening compliance check to make sure that all your sites have accurately set up till systems.
Operators looking for stocktaking or compliance auditing support during reopening should visit www.venners.com for further information.