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NewViews for DOS

NV1 - Changing the GST/HST Rate

On July 1, 2006 the Canadian GST rate changes from 7% to 6% and the HST from 15% to 14%.
On January 1, 2008 the Canadian GST rate changes from 6% to 5% and the HST from 14% to 13%.
Below are the steps necessary to change the GST rate in your NV1 program.

From December through January (and possibly later) you may be recording purchases and sales at 2 different rates. For instance, during January you will probably be recording purchases that occurred both before and after the rate change. Therefore you have to be careful that you have the correct rate set as you enter or edit your transactions. Please read the section "Transition Period" for more information on this.

Changing the GST/HST Rate

The GST/HST rates used for purchases and sales are stored in the procedures SETUPP (purchases) and SETUPS (sales).

For most sets of books all that is required is to run each procedure and adjust the GST/HST rate from 6% to 5%. Tax calculations performed by the TAXP (purchases) and TAXS (sales) procedures will then use the new 6% rate.

Purchase Settings - The SETUPP Procedure

Standard SETUPP prompt showing tax settings before the GST rate change.

An example of the standard SETUPP prompt is shown above.
The only change that is required is to change the Tax 1 Default sales tax rate from T6 to T5.

(If the description you have set for either tax contains the old percentage rate, edit the description to the new rate.)

HST version of the SETUPP prompt showing tax settings before the GST/HST rate change.

Above is an example of the HST library version of SETUPP.
Two changes are required under the Tax 1 settings:

  • Change "Default sales tax rate" from "T6" to "T5".
  • Reduce the"Default harmonized tax rate" by one. For example "T14" becomes "T13".

(If the description you have set for either tax contains the old percentage rate, edit the description to the new rate.)

Sales Settings - The SETUPS Procedure

Standard SETUPS prompt showing tax settings before the GST rate change.

An example of the standard SETUPS prompt is shown above.
The only change that is required is to change the Tax 1 Default sales tax rate from T6 to T5.

Note: In the example above, the 6% GST rate is included in the Description. This must also be edited to 5%.

HST version of the SETUPP prompt showing tax settings before the GST/HST rate change.

Above is an example of the HST library version of SETUPS.
Two changes are required under the Tax 1 settings:

  • Change "Default sales tax rate" from "T6" to "T5".
  • Reduce the"Default harmonized tax rate" by one. For example "T14" becomes "T13".

(If the description you have set for either tax contains the old percentage rate, edit the description to the new rate.)

Exceptions

For most NV1 books, the GST rates for all, or most of your purchases and sales are set in the SETUPP and SETUPS procedures. Exceptions to these settings are stored in individual expense or sales account notes using the NOTES procedure.

For example, if the GST Default tax rate in SETUPP is set to T6 it means that all or most of the products you buy are subject to 6% GST. However you may have expense accounts in which you record purchases of GST exempt goods, such as food. These accounts are normally set to GST exempt by running the NOTES procedure and setting the Tax 1 (GST) rate to "X" (for exempt.) The same would be true for sales; the GST Default Tax Rate in SETUPS is set to T6 and any sales accounts for exempt goods have the tax rate set to X.

Below is an example NOTES procedure screen for an expense account that is exempt from GST:

As stated above, this is the way the GST rates are set in the majority of NewViews books. If this is the case in your books, then changing the GST rate is simply a matter of changing T6 to T5 in both SETUP and SETUPS.

However, some books contain GST settings that are the opposite to this. In these books the Default Tax Rate in SETUPP and/or SETUPS is set to X, meaning that most purchases and/or sales are GST exempt. Then, purchases or sales accounts for taxable good have the tax rate set to T6.

Here is an example of the NOTES procedure run on an expense account where the GST rate is set to T6 (taxable at 6%).

This is an example of the NOTES procedure run on a sales account where the GST rate is set to T6 (taxable at 6%).

If your books are setup in this way, then you will have to run the NOTES procedure on expense and/or sales accounts that have the GST rate set to 6% and change them to 5%. Note that this will make switching back and forth between the two rates more difficult during the transition period.

Testing The New Rate

Regardless of how the GST rate was configured in your books, it is very important that you test the GST calculations for the new rate. You should enter sample purchases and sales to as many of your expense and sales accounts as possible and run the TAXP or TAX procedure on the samples. Then examine the GST calculated to ensure that the new rate is being used correctly. When you are satisfied that all is well, delete the test transactions from your books.

(The BLKCOPY and BLKPASTE procedures can be handy tools for this. You can quickly BLKCOPY one or more purchase or sales transactions, and then BLKPASTE them using a date like January 15, 2008 which will make the pasted entries appear at the bottom of the ledger. This will save you the trouble of manually entering test transactions.)

Updating Transactions Stored With BLKCOPY

Some users have blocks of recurring transactions stored with the BLKCOPY procedure. The usual case is a block of standard sales transactions that are repeated every month using the BLKPASTE procedure. If the stored transactions contain GST entries at the old 6% rate, you will need to update the stored transactions to the new rate.

This is quite easy to do:

  1. Run BLKPASTE, press F7 and choose the entries that need to be updated.
  2. Set the date to some future date that is after all of your existing transactions.
  3. Press F5 to paste the transactions.
  4. Ensure your GST rate is set to 5% in SETUPP or SETUPS
  5. Mark the pasted transactions in a block and run either TAXP or TAXS (depending on the type of transactions.)
  6. Inspect the results to make sure the GST was calculated correctly.
  7. Run BLKCOPY and choose the same you picked in step #1 to overwrite the old (6% GST) transactions with the new ones.
  8. Run BLKDEL to remove the transactions from the ledger

The Transition Period

During December and January you may need to record purchases or sales at both the old and new GST/HST rate. For example, in January you may be entering purchase invoices dated in December with 6% GST/HST, and invoices dated in January at the new 5% rate. Or, you may be entering sales for both months which again require calculations at the two different rates. For this reason you will probably need to change the rate back and forth several times before all your data entry settles at the new rate.

Switching Rates - DOS NewViews

While changing the tax rate In DOS NewViews is quite easy, it can be made easier still by using the Save/Pick feature of SETUPP or SETUPS.

"Save" and "Pick" allow you to save combinations of settings under names you choose, and then quickly restore them when needed. Here is how you can use this feature to easily change the tax rates for purchases and sales back and forth between 6% and 5%:

Run the SETUPP procedure

  1. Ensure the tax rates are set for 6% GST.
  2. Press [F6] (the "Save" key) A list-box will pop up in which you can enter the name you want to save the 6% settings under.
  3. If the list box is empty, simply type in a name like "6% GST Settings" and press [Enter].
  4. If there are already items in the list you can insert a new name by pressing [F6] and then entering the name. Or you can overwrite the settings under an existing name by cursoring to the name and pressing [Enter].
  5. Now adjust the settings for the new 5% GST rate
  6. Press [F6] to display the list-box.
  7. Press [F6] again to insert a new item in the list.
  8. Type in a name like "5% GST Settings" and press [Enter]

To store named sales settings, repeat the instructions above substituting SETUPS for the procedure name in step 1.

Saving SETUPS settings using the [F6] Save key.

Above is what you will see during the last step of the instructions above.

Using Saved Tax Settings

Now that you have saved the settings you can easily change from one rate to another as required when doing data-entry. To switch to a given rate and calculate tax:

  1. Run the SETUPP (or SETUPS) procedure
  2. Press [F7] (the "Pick" key)
  3. Cursor to the settings name you wish to use and press [Enter]. The settings will change to those stored under the name you chose.
  4. Press [F5] to record the current settings and exit the procedure.(Don't press [F4] - the changes will be thrown away.)
  5. Use TAXP (or TAXS) to calculate the tax on the purchases (or sales) that require the chosen rate.

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Release Date: December 20, 2012

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