VAT in Sales

VAT is included in both the sales and purchases for your business. There are different methods in which VAT is calculated on sales, according to the region and VAT treatment of your customers and vendors. In Zoho invoice, VAT treatment of your contact is taken into account and the VAT associated with the item is automatically populated. Making it simple for your accounting purposes.

Sales Within the UK

For creating a sales (Invoices, Estimates, Credit Notes) transaction that is within the United Kingdom,

• Select the customer whose VAT treatment is for United Kingdom.
• Add the item for which you are creating the sales transaction and select the VAT amount.

VAT treatment of your customer can be changed only for that estimate, invoice or the order you create. Click on the notification, select the VAT treatment you prefer and click on Update.

You can also set the VAT treatment as a permanent change by checking on the Make it permanent? box.

Sales Outside the UK

For sales (Invoices, Estimates, Credit Notes) that are made outside the UK, you will be able to find the labels that will denote if its a Goods that is being sold or a Service that is being rendered. If a service is billed in the same invoice where an item is being sold outside the UK, then the service will be associated to the item and will be labeled Service Associated to Goods.

• If the sale is made to an EU country, the sale will get recorded under Total Value of goods you supplied to other EU countries in the VAT return report.
• If the sales is made to countries outside EU, it will get recorded under Your total sales excluding VAT in the VAT return report.

Sales to EU-VAT Registered Customers (NI Protocol)

If you’re a business in Northern Ireland and you are selling goods to a customer who is in the EU and is registered for VAT, then the VAT can be Zero-Rated or a Zero Rate (0%) VAT can be charged on your export. To do this, you’ll have to enable the NI protocol from VAT settings and select the VAT treatment as EU-VAT registered [NI Protocol] for the customer.

To enable the NI Protocol in your organisation:

• Go to Settings > VAT > VAT Settings.
• Mark the Enable trading of goods between Northern Ireland and the European Union (NI Protocol) checkbox.
• Click Save.

---