Banding Scheme for Churches and Cathedrals

Some churches/cathedrals that are registered for VAT may have agreed with HMRC the use of the Banding Scheme (reference HMRC Banding Scheme). Where that scheme has been agreed there will be an agreed banding - from A to D.

The use of the scheme will mean an adjustment to the VAT on purchases - based on the agreed banding.

When a band is confirmed in the VAT Configuration Liberty Accounts will add special VAT rates appropriate for the band e.g. if band B then †B20%. The appropriate rate should be selected when entering expense transactions.

Under your Accounts menu and Expense you can set the default VAT rate to be applied on a individual account by choosing the appropriate rate for the particular account (these can still be changed when entering the transaction).

On data entry and the selection of the banding VAT rate the system will calculate the VAT based on the banding. For example a £100 expense where †B20% is the VAT code and on bank B (65%) the VAT will calculate as £13 (£100*.2*.65).

Your VAT reports will all show the banding VAT code against the transactions.

Submission of the VAT Return is a simply click as the calculation of the adjusted VAT has been applied against each transaction as entered.