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Summary

Understand how the Close Tax Periods feature works in Sage 200 Evolution.

Description

This article helps you to understand how the Tax | Close Tax Periods feature works and the reporting benefits it has for your monthly Tax submissions and -reporting.

Resolution

Consider the following advise to understand how the Close Tax Periods work:

A) Overview

The Close Tax Periods feature main purpose is to help you control the tax (VAT) processed on backdated transactions to still include such tax amounts on your tax reports for periods that have not yet been submitted to your local tax authority.  

B) Practical Scenario

Please first note:

To properly understand how the Close Tax Period feature works, please first backup your company, restore it as DEMO and then apply the steps below. You can then properly test and carefully evaluate how it can benefit your business processes.

To explain further, consider the following practical scenario:

1. Go to Tax | Maintenance | Tax Defaults

2. On the Options tab, select the first Tax Period that should be closed and click the OK button below. You would normally select the relevant period for which you have already submitted your tax reports to your local tax authority.

Note that all periods prior to this period will automatically also be closed.

3. Notice that Tax Periods are automatically created when and in accordance with your Common | Maintenance | Company Details | Accounting periods are established and created.

4. Now go to Tax | Transactions | Close Tax Periods.

5. In here click the Close Tax Period button.

6. Now click the Yes button on the message prompt.

7. In this scenario we also want to close the Sep 2017 tax Period as well. Therefore, click the Close Tax period button again. In this case you have already submitted your tax report for the September 2017 period as well.

8. Click OK on the message below.

9. Click Yes on the message below.

10. You should now notice the first manually closed Tax period as closed in step 7 above.

11. Now go to Tax | Reports | Tax Listing and run the report for all periods

12. You’ll notice that even transactions with transaction dates in the Closed Periods are also still included in the report. 

13. If you go to Tax | Enquiries you’ll notice that only closed Tax Periods are available for selection. Click the View button when done.

14. Notice the closed periods’ transactions are now displayed.

15. Now try to process a normal Customer Invoice (or GRV) for 15 Sep 2017 (in a currently closed period) that has a tax value.

16. You’ll notice that the invoice is processed without any issues or even warning messages

17. No run the Tax Listing Report for Sep 2017 as below

18. You’ll notice that the new Tax Invoice is included as expected

19. If you select the Closed Tax Periods option, then only the Closed Periods can be selected.

20. However, invoice transaction invoice of 15/09/2017 is not included.

 21. Also notice you cannot select both options below: either the Closed Tax Period option, or the Out of Period Transactions option, but not both together

22. Now run the Tax Listing report as below

 23. This time, notice that the above invoice of 15 Sep 2017, as processed in a closed period after the period has been closed. is now included as marked below.

24. This means you can run your Tax Listing report for a period that has not yet been submitted  to your local Tax Authority, and still include back dated transactions so their tax can still be included and reconciled (Customer Invoice tax vs Supplier Invoices tax)

25. To only view transactions for the open (non-closed) periods and exclude such back dated transactions as above, run the report as below.

26. This time you’ll only see transactions that were processed in periods that are not currently closed in relation to the actual transaction dates.

For example, the October 2017 transactions listed below were processed and at that time the October period was not closed yet.

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