VAT on postage needs to allow fro zero rated and 20% items

See message below from a customer.

"VAT on postage is charged not by how you send it (i.e. royal mail no VAT charged / courier there is) or whether you choose to claim the VAT element back but… the postage VAT is calculated on the items being sent.

So, zero rated items you don’t charge VAT on postage.

Standard rated you charge 20%.

If you have mixed items you apportion the amount…and how you calculate this is…take total postage amount (take 20% away if you’ve listed it as inclusive) or add 20% if not. The answer to the percentage you then divide by the total amount of items and multiple by the standard VAT rate items and that gives you the answer."

I charge zero rated and 20% VAT items but In your invoice system currently there is only a general vAT postage at the bottom. Can this be changed to incorporate the above?


Helen Gordon

Hi Helen,

If you create Inventory Items for the various types of postage, you can select the VAT rate there. This is how I do most of my invoice items as it speeds things up. There may be another way to do it but I think that will work for you.


New categories for Out of Scope and Exempt supplies are being worked on and area likely to come in late May or early June. With any VAT related updates there is a high degree of complexity and a lot of testing we must embark on first.

In the mean time you can just mark those sub totals as zero percent VAT and this will still result in an accurate VAT calc. You can also adjust the VAT return before submission if needed.