How is VAT calculated on the Transactions by Category View?

When creating a VAT submission, the Transactions by Category view is a helpful way to check that VAT has been entered correctly for each of the transactions within the claim.

This is an alternative / in addition to being able to check transactions on the Transactions by VAT Rate view, and you can easily switch between these two views at the top of the VAT return screen.

Similarly, you can also toggle at the top of the screen between viewing:

• Income transactions (sales & other outputs)
• Expenditure transactions (purchases & other inputs)

Single Fund / Category Purchases

For purchases recorded against a single fund / category, the Subtotal, VAT rate and VAT amount will exactly match the details that were entered

Split Fund / Category Purchases, where a regular VAT rate has been used

For purchases recorded against a multiple funds / category where the VAT rate is set to '20%', '5%', '0%', 'Exempt' or 'N/A (outside the scope of VAT)' the Subtotal, VAT rate and VAT amount will also exactly match the details that were entered, and the VAT amount will be correctly split

The VAT amount for each fund/category is calculate based using the same ration the of the split of the expenditure amounts

For example: this purchase is split with £50 of the expenditure recorded to the Travel category, and £150 to the Training category (a ratio of 1:3)

The VAT for this purchase is also therefore split in the same 1:3 ratio on the VAT Return - Transactions by Category View screen

Split Fund / Category Purchases - Where a custom VAT amount has been entered

Where this becomes more complicated, is with purchases split over multiple funds/categories AND where the VAT rate has been custom set (because there is no guarantee that it's correct to split the VAT amount in the same ratio as the expenditure has been allocated.

However, splitting using the same methodology is still the best way for ExpensePlus to do this, and typically this is unlikely to cause an issue, as it's typically purchases of food (e.g. Tesco receipts) that tend to be custom VAT and where the amounts involved (and therefore the possible varience) is likely to be smaller anyway.

Where this could result in a larger varience would be for example if you were sent an invoice for a conference venue and where you've recorded the room hire element to one fund/category and this is not vat-able, and recorded the refreshments element to a different fund/category and this is VAT-able. In this scenario, ExpensePlus would split the overall custom VAT amount between the fund/categories...whereas it of course all relates to just one of the funds/categories.

In rare cases where this is the case, during the VAT adjustment step in creating a VAT submission, you will be able to over-ride the VAT amount to be recharge to each fund/category to correct for this (there is no need to worry about correcting for this on the VAT Return - Transactions by Category View screen, as the information on this view won't affect your VAT return which is done at purchase level (not fund/category level).