We often get calls from DragonDMS user who have transactions listed under Verification Results; here will explain why some transactions from DragonDMS are being identified when running your VAT return.
When the VAT return is run in Sage the following screen may be displayed, this is designed to make you aware of transactions in your VAT return that may need to be checked.
Transactions with an unexpected VAT value
Any transactions where the tax amount is not what Sage would expect will be listed. Expected VAT rates are defined in your Sage VAT Verification settings, the default VAT rates are less than or equal to 18% or more than 20%.
You can view your VAT verification settings in Sage > Settings > Company Preference > Verification Settings.
When DragonDMS posts a Service Invoice to Sage, it posts different transactions for each of the components of the service job (eg Labour, Parts, Extras, and MOTs), these are posted with a Net Value and no VAT, another line is posted that has no net value but contains all the VAT on the invoice.
The Sage verification is just highlighting these, because is sees no VAT on transactions with a net amount, and conversely it sees VAT on transactions with 0.00 net amount (This is when DragonDMS posts through the VAT element).
In the example above, the service invoice net total is £398.85 (£54.85 is for an MOT which is outside the scope and is posted to T9). The VAT on the service invoice is £68.79 which is posted as a separate line.
The VAT is correct, but is posted in a different way to that which Sage expects.
Transactions not using your most commonly used tax code
In the verification settings you can specify your most commonly used tax code, by default this is T1.
Any transactions in your VAT return that have a different tax code will be listed, for example some common transactions in DragonDMS that don’t use T1 are:
Margin Vehicle Purchases are posted to T0
Margin Vehicle Sales are posted to T10
Internal Service Invoice, MOT’s, First Reg Fees & RFL are posted to T9
Finance Commissions are posted to T2
