Set a tax rate on a loan or member charge

Settings & Administration Updated

Summary

Set up a tax rate, put it on a loan or member charge, choose whether the tax sits inside the amount or on top of it, and read the split back on the member's charge.

About 6 minutes · 9 steps.

Also called: VAT on fees, excise duty on charges, tax inclusive, tax exclusive, tax on loan fees.

Prerequisites

  • A CAMS Admin sign-in that can open Settings → Accounting and edit a product's fees.
  • The tax your institution must charge, its rate, and the ledger code the tax should post to. Your accountant has these.
  • Whether the law treats that tax as already inside your published fee or as an amount added on top. This decides one setting below, and it is the setting people get wrong.

Step-by-step

Set up the tax rate

  1. Sign in to CAMS Admin.
  2. Open Settings, then Accounting, then Tax Rates.
  3. Click Add Tax Rates. Give the rate a Name and a Code.
  4. Add a tax line for each tax that makes up this rate, with its Rate % and the Ledger Code it posts to. Most institutions need one line. Add a second only where two taxes genuinely apply to the same charge.
  5. Save, and check the rate shows as active in the list. An inactive rate applies no tax at all, and CAMS will not warn you when a charge is raised without it.

Put the rate on a charge

  1. Open Administration, then Product, open the product you are charging on, and open its Fee & Penalties tab. Open the fee or penalty you want to tax.
  2. In Tax Rates, start typing the name of the rate you created and pick it from the list.
  3. A Tax Calculation setting appears once a rate is chosen. Set it to Inclusive or Exclusive:
    • Inclusive means the amount you entered already includes the tax. Enter 118 against an 18% rate and the fee is 100, the tax is 18, and the member pays 118.
    • Exclusive means the tax is added on top. Enter 100 against an 18% rate and the fee is 100, the tax is 18, and the member pays 118.
    • Inclusive is what CAMS selects for you when you first pick a rate. Change it if your fee is published before tax.
  4. Save. To see the result, open a member, go to the Charges tab and open a charge. The details show the fee and the tax on separate lines.

Common pitfalls & FAQ

  • No tax appears on a new charge. Check the tax rate is active. An inactive rate applies no tax, silently.
  • The Tax Calculation setting is not on the form. It appears only after you pick a tax rate. Choose the rate first.
  • Inclusive and Exclusive both ended at 118 in the example above. The difference is what you type in. Inclusive treats your figure as the full amount the member pays and works the fee out underneath it. Exclusive treats your figure as the fee and adds tax to it. Get this the wrong way round on a live product and every charge is out by the tax.
  • CAMS refuses to save the rate. Inclusive tax lines cannot add up to 100% or more, because no fee would be left underneath the tax. Check your rates.
  • Charges raised before you set the rate have no tax line. The split is recorded when the charge is created. Older charges are unchanged, and you should not edit them to look otherwise.
  • The ledger shows fee and tax separately. That is deliberate. Fee income and tax collected post to separate entries, so you can report what you owe the revenue authority without unpicking your fee income.
  • Different charges can carry different tax. Each fee or penalty carries its own tax rate. A product with several charges can tax them differently, or leave some untaxed.