Conditional Discounting in the UK from April 2015 in TBS

As from April 1st 2015 there is a change to the tax treatment of Conditional Discounts used in the UK

From this date onwards, if you issue an invoice with a discount that is conditional upon being paid within a certain period of time, then the invoice should be issued showing the full (gross) value of the items on the booking along with the prevailing tax applied against the full (gross) value of the items

The offered discount amount then includes a tax credit proportional to the discount offered

TBS has preferences for all of these settings within the individual Department Preferences entry :

This shows the initial requirement found in the GENERAL OPTIONS section c) Clients - in order to allow for conditional discounts - and also whether you wish for new clients being added to default to use conditional discounts (optional !).

Secondly, the relevant options for the calculation of taxes is as follows :

With these relevant settings in place, your invoices and quotes and confirmations etc will be able to display the correct values upon being printed

Once the settings are in place, when an invoice is summarised, the tax is displayed on the summary report in two parts, so a primary amount and the conditional amount, and the discount offered remains as before

If using TBS accounts, then the sales ledger entry includes the discount PLUS the relevant tax portion as the 'settlement' value

When a payment is entered which allocates against the invoice as a settlement entry - then the net discount allowed is credited back against the Discounts allowed code, and the discount tax is also credited against the Tax Inputs account code