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Overview

Tax rates decide how much tax is added to each line on an invoice, such as a 20% standard rate, a 5% reduced rate, or 0% for exempt customers. You create your rates once, then assign them to everything you sell in the chart of accounts.

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How to access

Go to Settings → Billing and payments → Invoices and tax and open the Tax tab. The Tax tab in Invoices and tax settings

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Tax settings

The display options and default tax rate appear once Add tax to invoices is on.

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Add a tax rate

  1. On the Tax tab, under Tax rates, select Add tax rate.
  2. Enter a Name, such as “Standard” or “VAT”, and the Rate as a percentage.
  3. Save.
Then assign the rate to the items it applies to in the chart of accounts.
If you use an accounting integration, such as Xero or QuickBooks Online, give each tax rate exactly the same name and rate as the matching rate in your accounting system. Otherwise invoices won’t transfer.

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Standard, reduced and exempt rates

Each item you sell can have up to three tax rates:
  • Tax: the standard rate, used for most customers.
  • Reduced Tax: used for customers whose Tax type is Reduced.
  • Exempt Tax: used for customers whose Tax type is Exempt, such as charities.
Set a customer’s Tax type on their record, under Account → Contact and billing, in Personal billing settings.

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Personal tax rates

To charge one customer a specific rate on everything they buy, enter it as their Personal tax rate in the same section of their record.
A personal tax rate overrides every other rate, including the rates set on individual items.

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Which rate is used

When Nexudus invoices an item, it uses the first of these that applies:
  1. No tax, if Add tax to invoices is off.
  2. The customer’s Personal tax rate.
  3. The item’s Reduced Tax or Exempt Tax rate, if the customer’s Tax type is Reduced or Exempt and the item has that rate.
  4. The item’s Tax rate.
  5. Your Default tax rate.

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Change or delete tax rates

Changing a tax rate, the default rate or a customer’s tax settings only affects future invoices. To change the tax on an invoice that’s already been issued but isn’t paid yet, open the invoice, edit each line, and choose a different Tax Rate. Paid invoices can’t be changed. See Invoices. You can’t delete a tax rate while items still use it. Remove it from those items in the chart of accounts first.