Excess Credits and UK VAT

When a financial transaction that results in a credit balance for a service agreement is frozen, the amount of the excess credit must be accounted for as a prepayment of energy related charges and VAT. VAT is calculated at the reduced rate for domestic customers and at the standard rate for non-domestic customers. When the excess credit is used, the VAT liability is reversed.

A Create Excess Credit GL Details Customer Class FT freeze algorithm type CFTZ-VAT-GL is provided to create additional GL detail entries for unbilled revenue and VAT liability when the freezing of an FT results in a credit balance or a change to a service agreement's credit balance.