VAT for United Kingdom

Value Added Tax or VAT is a tax that is charged on most goods and services, sold and rendered by several registered businesses in the UK.

To enable VAT for your Zoho Expense account, you should choose your country as United Kindgom while creating a new organisation.

Configuring VAT will allow you to associate VAT while recording expenses.

VAT Settings

To configure VAT settings for your Zoho Expense account:

  • Click the Settings module under the Admin section on the left sidebar.
  • Select the VAT option from under from the List section.
  • Under VAT Settings, configure/fill the following information:
Option Description
VAT registration Check the option if your business is registered for VAT.
VAT Registration Number Enter your organisation’s VAT registration number.
International Trade Check the option if you are making expenses in other EU/non-EU countries.

VAT Settings

  • Once you’re done configuring your VAT settings, click Save for the changes to take effect.

Note: If the International Trade option is disabled, then all the expenses that are incurred in foreign currencies (non GBP) is assumed to be made in UK, and VAT will be enabled for those expenses.

VAT Rates

The UK government and the HMRC has defined the VAT rates. The below table provides more information about the government defined VAT rates.

Rate % of VAT What the rate applies to
Standard 20% Most goods and services
Reduced Rate 5% Some goods and services, eg: children’s car seats and home energy
Zero Rate 0% Zero-rated goods and services, eg: most food and children’s clothes

Adding a New VAT Rate

To add a new VAT rate:

  • Click the Settings module under the Admin section on the left sidebar.
  • Select the VAT option from under the List section.
  • Click on the + New VAT button placed on the top right corner.

New VAT

  • Add a name for your tax and set a percentage.
  • Click Save to save your newly created VAT.

Applying VAT to expenses

To apply VAT to your expenses:

  • Click on the quick create icon (+) present right next to the Expenses tab, or click on the + New Expense from the Expenses section.
  • An Expense creation form will appear on the screen.
  • Enter essential details such as date, category, and Amount.
  • Now, click on the VAT drop-down to select a VAT rate.

Applying VAT to expenses

  • Select whether your expense is VAT inclusive or VAT exclusive.
  • Click on the Save button to save your newly created expense.
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