VAT in Purchases

VAT is included in both the sales and purchase transactions of your business. There are different methods in which VAT is calculated on purchases, according to the region and the VAT treatment of your vendors. In Zoho Books, the VAT treatment of your contact is taken into account and the VAT associated with the item is automatically populated.

Purchases Within the UK

For creating a purchase (Bills, Expenses, Purchase Order) transaction that is within the United Kingdom,

VAT in Purchases

Purchases from Outside UK

For purchases that are from outside the UK, labels will denote whether its goods or services.

Reverse Charge Handling

While creating a purchase transaction for a vendor who is from outside the UK, the VAT field cannot be edited. Thus, the import VAT cannot be added for the transaction on the bill, expense or purchase order created.

To record the import VAT, you can create a bill separately by manually calculating the VAT applicable for the goods or services purchased.

Purchases from EU-VAT Registered Vendors [NI Protocol]

If you’re a business located in Northern Ireland and you purchase goods from a vendor who is located in the EU, then Acquisition VAT will be applied on the transaction and EU VAT rules will be followed.

Acquisition VAT in Purchases

To do this you’ll have to enable the NI protocol from settings. Here’s how:

NI Protocol

Once the Northern Ireland Protocol is enabled, you will have to select EU-VAT registered [NI Protocol] as the VAT treatment in the transactions.

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