VAT split payment mechanism

Payments to vendors exclude the VAT, with the VAT being paid either direct to the tax authorities or into a separate VAT bank account held by the vendor.

United Kingdom specifics

HMRC considers that the merchant acquirer (MA) is probably best placed to split the VAT from the customer’s payment because it is most likely to have information indicating that the vendor is overseas and the customer is in the UK. Failing that, and in particular where the MA is not in the UK, HMRC considers that either the payment service provider (PSP) or the card issuer might be required to split the payment.

How Infor meets the requirement

Select the VAT Split Payment check box when creating a Payables invoice.

See the Payables User Guide.