The British government has just announced that the VAT rate in the country will drop from 17.5% to 15.0% in order to combat their worsening economy and hopefully kick start consumer spending.
The main problem is that they have only given local businesses about a weeks notice to make the changes.
Given that I was right in the trenches during the changeover to a Goods & Services tax here in Australia in 1999/2000, I can appreciate the implications of this. While a change in the tax rate will not be as drastic as a change in the whole underlying tax system, I have still seen too many software systems where the tax rate is ‘built in’ as a fixed constant and is not user editable.
Most reputable accounting systems will let the user just go to an options screen and change a ‘Tax Rate’ field or change a line in a tax data file somewhere, but users of old systems may not even know where to find these system option screens.
Here’s hoping that the Australian Govt. does not see the need to change out GST rate from 10%. Ben Kepes over at Cloud Avenue has an article on how online accounting systems will handle this change with far greater flexibility that traditional software systems.
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