Adjust the VAT amount on new transactions

When you're creating a tax exclusive transaction, adjust the transaction's tax amount when you have a non-standard amount of VAT. You might make an adjustment when goods are second-hand, or if you want to summarise different tax amounts on a single line.

What transactions can you make a tax adjustment on?

You can make a tax adjustment to these transactions when the amounts are Tax Exclusive:

  • Invoices
  • Bills
  • Credit notes
  • Spend money transactions
  • Receive money transactions
  • Prepayments
  • Manual journals

Make a tax adjustment

  1. In your transaction, click the Image showing plus icon. on the Tax Rate column to open up the Tax Amount column.

    Image showing plus icon in transaction.

  2. Enter your non-standard amount in the Tax Amount column. Xero adds a line above the transaction total to display the adjustment amount.

    Image showing tax adjustment amounts.

  3. Save the invoice, send it for approval, or approve it yourself.

Only the amount in the Tax Amount column displays on your invoice or credit note, including PDF and online versions. The amount you've adjusted VAT by won't be noted.

Opening up the Tax Amount column on one transaction opens the column on subsequent Tax Exclusive transactions any user in your organisation creates.

How are tax adjustments included in VAT reports?

On the VAT Return all VAT totals include adjustments to tax you have made. They are not displayed separately.

In the VAT Audit Report each adjusted VAT amount appears in a separate 'Adjusted' section for the rate:

Tax showing on Audit Report with 'Adjusted' in tax rate name.

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