It's easy to create and amend tax codes. Let's take a look at how to do this.
TIP: You can find details of the default tax code settings in our handy guides:
Create or edit a tax code
- On the menu bar click Settings, click Configuration then click Tax Codes.
- Select the required tax code and click Edit.
- Complete the Edit Tax Code window as follows:
Enter the required percentage. For example, to set up a 5% VAT rate, enter 5.00 in this box.
If you select the EC Code check box, the Rate box becomes inactive.
Include in VAT return To include transactions with this tax code in the VAT Return, select this check box. Reverse Charge You should only use this for the sale or purchase of items that fall under the remit of carousel fraud. For example, mobile phones. Don't use it for standard reverse charge transactions. Flat Rate Capital Asset Select this option if you're on a Flat Rate VAT scheme and you want to use the tax code for capital assets. Enable EC Code or EC Code To flag your tax code as an EC tax code, select this check box then from the drop-down lists, choose the relevant options. Link To This option is only available for EC purchase tax codes.
If this tax code should record notional VAT, choose the required tax code you want to link to. Notional VAT is calculated based on the rate of the code you link to.
Description Enter a description for the tax code.
- Click OK then click Apply.
- Click Close then if prompted to save the changes, click No.