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Club Systems' Accounts

Club Systems changed the rate it charges VAT to its customers on the 1st December 2008 to 15%.  On the 1st January 2010 we will revert to charging 17.5%.  We will explain here, how this might affect your club.

Last year we received some calls from customers who believe that they should only pay 15% VAT on our annual support Invoice (dated the 1st November 2008).  Many took the stance that because the bill related to services for 2009 and/or they had paid the bill after the 1st December 2008 the new (Temporary) VAT rate should apply.  We will explain below why, this was not the case.  And what will happen now the rate reverts to 17.5%.

VAT is charged at the rate of the VAT at the TAX POINT (date) of an invoice.  Companies such as ours with a turnover of more than £1.6 Million have to account for VAT on the date of issue of an invoice, not the date on which payment is recieved.  Club Systems treat this 'renewal' or 'bill' as a full VAT Invoice and will issue the same if requested. 

Our Annual CSiCare Support renewals were raised on the 1st November, we therefore paid the VAT element to HM Revenue & Customs at the higher 17.5% rate, as detailed on that document.  We also start to issue the 2009 software from November 2008 as many customers (hundreds in fact) pay in the first few weeks of Novermber.  We were given the option by HM Revenue & Customs to issue credit notes and new invoices to all customers.  We decided that the administration and environmental cost of printing over four thousand of these, together with refunding the hundreds of clubs that had already paid, would outweigh the benefit to the few clubs that cannot claim back all or at least a proportion of the tax amount.  Therefore the invoice amount stood, as issued.

Our 2010 invoices will be dated 1st November 2009 and therefore a VAT rate of 15% will apply, even though the rate will go up by 2.5% on the 1st January 2010.  Therefore any loss to your club in 2009, will be regained next year.

Club Systems have taken advice and believe that this course of action is fair, legal and is the most likely to benefit our customers.  All VAT will always be paid to HM Revenue and Customs.  As a fully registered, non cash accounting, business, we do not benefit in any way from this reduction or increase in tax.

If you pay a deposit for goods or services before the 1st January 2010, that are not due to be supplied until after that date, i.e. a new MerlinTouch EPoS system, your VAT invoice will be issued on the installation date and therefore VAT charged at the rate at that time.

VAT invoices raised and dated after the 1st January will reflect the new 17.5% rate.

If you have future enquiries regarding this or any other accounts issues, please click here to contact us.

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