[Disclaimer:The team at A2X are happy to provide users with technical assistance in applying tax rules to their A2X setup. We are not Tax Advisors and so our advice and suggestions on the application of tax rules cannot be construed as tax advice. We highly recommend that users seek advice from qualified accountants for their tax compliance.]
This article will show you a detailed example of how to configure A2X when you have multiple VAT rates when using Amazon's VAT calculation service and when not using it. The data that A2X imports in each situation is slightly different, though the overall accounting is the same.
Let's look at some examples:
The Amazon VAT Calculation Service is turned on and I have both 0% and 20% VAT rates.
With the VAT calculation service on, you will get A2X data that looks like this:
Sales - Adult £1000
Sales - Children £1000
VAT - £200
In the Accounts and Taxes, wrap the taxes back into sales and apply the one rate.
The overall total of VAT 20% sales is going to still be £1200 and the total of VAT zero is going to be £1000. This should ensure that Xero’s/QBO tax return is still calculating the expected results.
The Amazon VAT Calculation Service is turned off and I have multiple VAT rates.
Without the VAT calculation service on, you will get A2X data that looks like this:
Sales - adult £1200
Sales - children £1000
In the Accounts and Taxes settings this can be coded as:
The Xero VAT return would show that £200 of VAT was collected on the £1200 of adult clothing, and that a further £1000 is zero rated.