We are funeral directors and monumental masons. The funeral side of our business is exempt from VAT but the stonemasonry side is Vatable. We therefore have to carry out a partial exemption calculation when we do our VAT return (we can claim back a proportion of the VAT on anything used by both sides of the business. That proportion is calculated by dividing our Vatable sales figure by our total sales figure). We currently use Sage Line 50 and manage this by giving different VAT codes to transactions depending whether they relate to an exempt, vatable or joint expense. Can your software deal with this type of calculation? I have never liked Sage and would love to find an alternative.

Yes, Speed-e-books supports partial exemption VAT accounting.

Use the Activity No. column to mark each transaction with the relevant VAT code / type. E.g. 001 for Standard Rate, 002 for Zero Rate and 003 for Joint Rate. When you prepare your VAT reurn for the quarter, using the Filter Button, select the relevant VAT Quarter in the VP Column to give you all entries relating to that VAT Quarter. Then select each VAT code in turn in the Activity No. column using the Filter Button. The total of VAT code 001 will be fully recoverable and these entries will require no adjustment. The total of VAT code 002 will need to be blocked from recovery. To do this simply raise the appropriate journal in the JA software page to transfer total 002 VAT out of the VAT Control Account and into Non-recoverable VAT in the Profit and Loss Account of the business. The total of VAT code 003 will need to be treated in the same way as code 002 but instead of 'blocking' all of the VAT from recovery, you would apply your apportionment rate accordingly and block that which should be blocked, permitting the balance to enter the VAT Control Account.

The recovery side of the VAT Control Acount (in the Balance Sheet) now contains all the recoverable VAT for your business activities and the Non-recoverable VAT Account (in the Profit & Loss Accont) contains all the blocked VAT.

Speed-e-books requires a little manual intevention, over say Sage or Quickbooks which part-automates the process. But Speed-e-books shows you exactly what is happening. VAT Inspectors truly appreciate seeing this level of clarity in the bookkeeping / VAT Accounting process.

Finally prepare your VAT Return from the totals of your trading activities and adjust for in line with the VAT accounting process outlined above. The sum liability of the VAT for the quarter will agree with the outstanding balance of your VAT Control Account in the balance sheet until the liability is cleared / paid.

Your accountant will be able to show you how to raise the necessary journals. This is best left to them in case there are specific accounting issues within your business operations.

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