Purchase orders – are you using the right one?

If you are buying goods and services regularly it’s important that you are using the right type of purchase order (PO), to ensure VAT is correctly recorded and calculated

Jan 4 2021

Using the wrong PO type could cause problems when invoices come in delaying payments to our suppliers.

There are three main types of PO available depending on what and how you are buying items, the table below outlines which type to use when. Don’t forget for purchases under £250 you can use a purchasing card – a much quicker and simpler process.

Order Type

 

eStore Catalogue

Simple Shop

Service Shop

Can’t Find

Purchasing Card (Under £250)

 

Goods /single line items with single VAT rate

x

x

x

x

x

Goods/multiple line items with multiple VAT rates

x

x

 

x

x

One off service with single VAT rate only

x

 

x

 

x

One off service with multi VAT rate

 

x

 

 

x

The Government’s new policy ‘Making Tax Digital’ see news rules coming in around reporting of tax and VAT, so it is important that we are following best practice when it comes to ordering. For more support follow the guidance.

Useful links 

The rules relating to Making Tax Digital can be found by clicking on the link below: -

https://hants.sharepoint.com/sites/CN/SitePages/Making-Tax-Digital.aspx

https://www.gov.uk/government/collections/making-tax-digital-for-vat

If you are unsure what rate of VAT, you will be charged for the items you are ordering you will find further information by clicking the link below: 

https://www.gov.uk/vat-businesses/vat-rates