Manually Applied Tax #
To enter VAT manually on your expense add an item or import a bank card transaction into your expense claim as normal. Click on the pencil next to your expense item as shown above to open expense item details. In the expense item details click on the tax calculator icon as highlighted above.
- Once you have clicked on the tax calculator icon you can enter the amount of VAT or tax on your expense
- You can also adjust what is called the “tax base” or the base amount used to calculate VAT. This is used in situations where only part of a hotel receipt or grocery purchase for example is subject to VAT
- You can optionally record the vendor’s VAT code or reference transaction number. This is useful when it comes to end of tax year VAT reporting.
Company Defined Tax #
If your iBE support consultant set up a default tax rate in your company code tax settings then expense types coded to use a specific tax code (such as SVAT or standard rate VAT for example) will automatically calculate VAT at this rate. VAT is calculated on the entire value of the expense item. You can manually adjust the resulting tax calculation as highlighted above in a similar way to how you enter VAT manually.
VAT is an input tax and is therefore inclusive in its calculation. For example if an expense item for £100 is entered with VAT at 20% the automatically calculated VAT is not £20. £20 VAT would apply to an expense item for £120 since £100 +£20 = £120. 20% VAT on £100 is calculated as £16.67 or 100 – (100 / 1.2)
Location Based Tax #
Standard VAT tax rates for key jurisdictions like UK and Europe are automatically updated in the iBE system. Depending on the location of either the expense (if a location was entered) or your company (if no location was entered), as well as the tax code applied to your expense type, the appropriate VAT rate is selected and tax amount calculated similar to company defined tax mentioned above.