This week we have release a few updates to more efficiently handle Out of Scope and VAT Exempt sales and purchases.
Rather than zero-rate your invoice and manually adjust the return (as was previously suggested), you can now flag the whole invoice as either “Out of Scope” or “VAT Exempt”, both these flags will fully exclude the invoice from the VAT Return calculations.
If you want to understand a bit more about all the wonderful VAT rates and exemptions, take a look at our new guide here.
You can apply these new filters to the invoice using the following check boxes (just above the save buttons):
The above options don’t appear by default for new invoices so you will first need to mark the supplier or client as “Exempt or Out of Scope for VAT purposes”. You will find this option in the supplier or client settings page.
Now when you run your VAT return, these flagged items will be completely excluded from the calculations.