VAT in the United Kingdom

In the United Kingdom, Value Added Tax (VAT) is levied by the HMRC (His Majesty’s Revenue and Customs) on the goods or services provided by registered businesses. If your business has or is expected to have a taxable turnover of more than £90,000 in the next 30 days, it is mandatory for you to register for VAT.

Insight: HMRC or His Majesty’s Revenue and Customs is the UK government department responsible for collecting taxes, administering benefits and credits, managing customs and border duties, and enforcing tax and financial laws. Formed in 2005 through the merger of the Inland Revenue and HM Customs & Excise, HMRC oversees income tax, VAT, corporation tax, National Insurance, and other key revenue streams, while also working to prevent tax evasion and ensure the smooth functioning of the UK’s tax system.

VAT Settings

Configure VAT in Zoho Spend

If your business is registered for VAT, you will be able to enter all your details and set up VAT in Zoho Spend. You can find all your details in the VAT Registration Certificate you’ve received from HMRC.

To configure VAT in Zoho Spend:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
In the Taxes pane, click VAT Settings.
Select Yes if you are a registered business under Is your business registered for VAT?.
Enter the Country Code and the 9 digit VAT Registration Number provided by the HMRC.
Enter the VAT Registration Date.
- Check the VAT Override option if you want to allow users to change the system-generated total VAT amount on purchase transactions.
If you are doing business outside United Kingdom, click the International Trade dropdown and check the Enable trade with contacts outside United Kingdom option.
Check the option Enable trading of goods between Northern Ireland and the European Union (NI Protocol) if your business is located in Northern Ireland and you trade with businesses located in the EU.
Click Save.

VAT Rates

This section lets you view and manage all the VAT Rates you’ll be using in your organisation. Apart from the default rates, you will be able to add new rates, edit existing ones, and delete them based on your requirements.

Add New VAT Rate

To create or add a new VAT rate:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
In the Taxes pane, click VAT Rates.
Click +New VAT and in the pop-up that appears:
Enter the VAT Name.
The VAT Rate(%).
Click Save. The new VAT Rate will be created.

View Records Associated with the Tax

To view records associated with the tax:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
In the Taxes pane, click Tax Rates.
Hover over the tax whose associated records you wish to view, and click the dropdown icon.
Click View Associated Records. You can now view all the records associated with the selected tax.

Edit VAT Rate

To edit an existing VAT rate, follow the steps below:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
In the Taxes pane, click VAT Rates.
Hover over the tax rate you wish to edit and click the dropdown icon.
Click Edit.
Edit the fields as desired in the pop-up that appears.
Click Save.

Pro-tip:

If a particular VAT rate has been applied already in some transactions, you can select the existing transactions you want to update tax the details for including draft transactions. %

Delete VAT Rate

To delete an existing VAT rate, follow the steps below:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
In the Taxes pane, click VAT Rates.
Hover over the VAT rate you wish to delete and click the dropdown icon.
Click Delete.
Confirm the action by clicking OK in the pop-up that follows.

Mark an Active VAT as Inactive

Note: System generated taxes cannot be marked as inactive.

To mark a VAT rate as inactive:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
In the Taxes pane, click Tax Rates.
Hover over the tax you wish to mark as inactive and click the dropdown icon.
Click Mark as Inactive. The selected tax will now be inactive.

Mark an Inactive VAT as Active

To mark a VAT rate as active:

Go to Settings on the left sidebar.
(OR)
Click Settings in the top right corner of the page.
Click Taxes under Taxes & Compliance.
In the Taxes pane, click Tax Rates.
Click the Active Taxes dropdown and select Inactive.
Hover over the tax you wish to mark as active and click the dropdown icon.
Click Mark as Active.