CRM vendor NetSuite has announced a plan for customers doing business in the United Kingdom who need to respond to the recent changes in value-added tax rates announced by the British Government a few weeks ago.

 

In a good bit of news, the revision reduces the standard VAT rate from 17.5 percent to 15 percent as of yesterday, requiring businesses to adjust their systems to comply. Using the NetSuite (News - Alert) Tax Engine integrated within the NetSuite business management software suite, customers can reconfigure to comply with the new rate without waiting for updates or software patches.

 

The British Government’s recent decision to reduce the standard VAT rate by 2.5 percent as part of the economic stimulus package left most businesses “with little time to adjust to the changed rate, adding to the compliance challenge,” NetSuite officials say. They add that the ability of SaaS (News - Alert)-based products to respond to changing business conditions in near real-time “trumps older generation, on-premise packaged software.”

 

And of course NetSuite officials can’t resist throwing an elbow or two: “In the case of this recent VAT change, vendors of packaged software products, such as Sage and Microsoft (News - Alert) Great Plains, are no doubt scrambling to distribute updates and coordinate consistent direction through a myriad of distribution channels.”

 

Not that this is an everyday concern: “Changes to UK VAT rates are relatively infrequent,” acknowledged Craig Sullivan, vice president of International Products for NetSuite.

 

Other vendors are touting their compliance products. Last week, Intrabench, which sells CRM and accounting software, implemented and made available the UK VAT change in its software, company officials said. Echoing NetSuite officials, Intrabench officials see the SaaS model as having an advantage, as a change can be made to a central system which goes out to all users of the software.

 

Companies that are not using a SaaS model may have to upgrade their software themselves to comply with the change, “and pay high costs for consultancy as well as deal with any problems that arise when the change takes place,” the Intrabenchers said.

 

Both UK businesses and global businesses with sales operations in the UK will be impacted by the VAT rate change. NetSuite customers can create a new tax code within NetSuite that reflects the new 15 percent rate with an effective date of 1 December 2008, then apply this new tax code to their catalogue of items sold using either mass-editing tools, or the graphical Import Assistant if a large number of items are involved, company officials say.

 

NetSuite Customer Support is also staffed with accounting compliance specialists to address customers’ questions.