Tax Rates: Override Tax Rate and Supplier Rate Differs

Tax Rates: Override Tax Rate and Supplier Rate Differs

Override Supplier Tax Rate

If you do not claim tax in your tax return, you can set up your tax rates to automatically override and gross up the nett amount of an invoice.  

For example, if you set 20% VAT with an override rate of 0% - all suppliers charging 20% will automatically adjust VAT to show 0%.

How to Set Up Override Supplier Tax Rate on All Suppliers

Navigate to the Settings icon on the left toolbar, and click  Accountancy.

From Accountancy, click edit next to Tax Rates.

This will open all the tax rates that have been set up, or imported, into Lightyear. If you don't see any, please return to the previous step to ensure you are connected to your Accountancy Software and these have been imported. 

Click the green pencil   beside the rate you want the override to be set against. In the window that appears, ensure Supplier Rate Differs is selected, and input the override rate in the Supplier Rate field.
Click Confirm. On the tax rate this has been set up on, ensure the boxes for Default Tax and Default Tax Free are both selected, as below:

When invoices come into Lightyear, the tax rate will show as No VAT (or the equivalent tax rate you have set up), with a 0% rate, with the Subtotal and Total grossed up.

How to Set Up Override Supplier Tax Rate on Specific Suppliers

If you want to apply the override to some suppliers, but not all, you can set a specific tax rate that will do this.

Like before, navigate to your Accountancy > Tax Rates, and find the tax rate you want to be used on specific suppliers.  Click the green pencil   beside this rate.

Check the box beside  Supplier Rate Differs? and input the override rate in the  Supplier Rate field. Click  Confirm. 

Unlike when applying the override to all suppliers, you don't need to select Default Tax or Default Tax Free for this method.

Go to the  Suppliers tab on the left toolbar.

You will see a list of all your suppliers in Lightyear.  Click the green pencil   beside the supplier  you want to set the override against.  Under the  Supplier Rules  section, find  Default Tax Code .

In the  Default Tax Code dropdown, find the tax code that was set up to allow the override - in this example, it is called 'OVERRIDE'. Click  Update once this is selected.

All invoices for this supplier will now override to this tax rate, showing a tax rate of 0%, with the Subtotal and Total grossed up.

Differing Supplier Tax Rates

If you have suppliers that charge a different amount than your rate set in Accountancy Tax Rates, and don't want to repeatedly select the different tax rate on invoices, you can set each supplier to have a Differing Supplier Tax Rate, known in Lightyear as a Default Tax Rate.

For example, if you have one supplier that has a 5% VAT rate, and are constantly updating the lines to reflect this, setting a Default Tax Rate will automatically update this for you.

To do this, click the Suppliers tab on the left toolbar. 

You will see a list of all your suppliers in Lightyear. Click the green pencil   beside the supplier you want to adjust the tax rate on. Under the  Supplier Rules section, find  Default Tax Code.

In the dropdown menu you will see a list of your tax rates, select the one you want to be used for the supplier going forward. Click  Update.


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