That taxing VAT problem

Relying on financial software for VAT calculations can leave users inhot water. Guy Clapperton reports on how the problem is being tackled.

Ashared dream of this nation's subjects is to be their own boss.

This desire has helped to fuel the retail PC market as enterprising people equip small offices and home offices with hardware and software to help them run their business. This has led to reasonably straightforward sales of PC, printer and a suite of business titles, the cornerstone of which is the accounting package, because one of the downsides to being your own boss is sorting out the VAT. The simple system shoud work fine and even if it fails most warranties are good enough to set it right without undue costs or stress to the business that sold it

Unless of course the software was flawed in such a way that it could leave the customer in serious financial trouble and yet be exempt from any regulations of any sort, thus getting the vendor out of any obligation to set things right. And that is what has been happening with a number of accounting packages aimed at the domestic user. The Business and Accounting Software Developers' Association (Basda) aims to set matters right as soon as possible.

Put simply, the problem is as follows. Anybody can set up in the UK as a software manufacturer, the general rule of caveat emptor applies. So if a company starts selling accounting software and it fails to process VAT properly, it's tough. In a bit more detail, a number of vendors have been setting up the VAT module within their accounts packages as if it operates in the same way as their own country's