Creating new VAT rates

[glasgow]

How do I add (or remove) VAT rates in the drop down menu while tagging a purchase. I’m sure Ive done both in the past…

What I’m wanting to do is: I’m reclaiming the VAT on a contract hire vehicle. I can reclaim 50% of the VAT. VAT is 20% but 50% is not 10%, it’s 8.33% of the total paid including VAT. So I’d like to have an 8.33% VAT rate for these transactions.

Thanks.

[ian_roberts]

It probably makes more sense to model it as a two-line purchase - suppose for the sake of argument that the total net amount is £200 (so the total inc VAT is £240):

• VAT-reclaimable element: net £100, VAT rate 20%, VAT amount £20, total £120
• Non-reclaimable element: net £120, VAT rate 0%, VAT amount £0, total £120

I would make this a recurring purchase, so then when you come to tag the bank transaction you just link the transaction to the unpaid purchase rather than creating a new purchase at tagging time.

[glasgow]

Thanks @ian_roberts this looks like a good solution, I will try it.

I think I don’t make enough use of purchases. I do everything on a cash accounting basis so never manually create purchases (for example when sent an invoice for payment in 30 days). I do see how QF creates a purchase order record for me but that’s in the background as far as I’m concerned.

Actually this might be a good way of splitting a couple of other transactions between business and personal use.

[ian_roberts]

Different workflows work for different people. Personally I generally start from the Receipt Hub in most cases - when I receive an invoice from a supplier I forward it to the receipt hub and then tag it there to create the (unpaid) purchase and attach the receipt to it for future reference, then the majority of my bank tagging is just matching payments to existing purchases. But I can see that if most of your purchases are things like rent or recurring subscriptions where you don’t get sent an invoice for each individual instalment then creating purchases via bank tagging might make more sense.