Non Claimable VAT On Retentions

Good Day

I am looking for information from the user community who have experience with a specific VAT requirement when retentions are created during the voucher match process.

Contractor progress payments are created using the two-way voucher match process (P4314). Retentions are deducted before tax from Progress payments and the supplier is paid the net amount including VAT (14%). We have some complex VAT requirements where in some instances VAT may be partially claimed, or not claimed at all . The standard set up will expense all non-claimable VAT when the voucher is raised.

Standard JD Edwards’s functionality adjusts the VAT on Retention when the Retention is released. If the VAT on the Retention is subject to Partial or Non-Claimable VAT, the system will only Expense the Non Claimable portion when the Retention is released.