Inventory, FnB, Adaco: VAT Rate Reduction to 5%

From 15th July 2020 to 12th January 2021 the reduced (5%) rate of VAT will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés and similar premises across the UK.

What does this mean?

• There is no change on invoices received from suppliers. The standard 20% rate of VAT will still apply
• Customers should change the configuration of some categories of sales items (in POS and Fourth) from the standard to reduced VAT rate
• The standard rate (currently 20%) will continue to apply to other sales items (and a few remain exempt)

What changes will apply to Fourth’s Purchasing & Inventory solutions?

• A new system VAT value has been added to all UK Inventory (formerly known as 'FnB R9') customers. This will be highlighted as a “Reduced Rate” of 5%
• A new Sales Tax list item has been added to all UK Recipe and Menu Engineering (formerly known as 'StarChef') customers. This will be highlighted as a “Reduced Rate” of 5%

For guidance on how to apply the new rate to your recipes please see here: Inventory | Restaurants - Updating Recipes with new VAT Rate in RME and Inventory 

What changes could you choose to apply to your Fourth solution?

Recipe and Menu Engineering

As this change affects the sale of food and non-alcoholic items, the sales tax can be changed to this reduced rate for applicable recipes. This will allow an updated calculation of the suggested gross profit for each dish based on the sales price entered, ensuring that menu modelling is updated to reflect the changes.

Inventory

For Customers using Fourth’s Inventory Solution, the system will continue to use the actual net sales value received from your point of sale provider in any cost of goods calculations reviewed at the end of the period.  

Purchasing and Inventory (formerly known as 'Adaco') 

Users can create their own rate schedules, and the reduced rate of 5% can be created and applied to recipes as required. Information on how to add a new rate can be found here: Adaco - Creating a Rate/Rate Schedule

FnB Manager

For Customers using FnB Manager, custom VAT codes can be created within Enterprise Manager to adjust the VAT applied to recipes to the reduced 5%. The system will continue to use the actual net sales value received from your point of sale provider in any cost of goods calculations reviewed at the end of the period.  Information on how to add custom VAT codes can be found here: FnB Live - VAT Rate Change