Tax rates
A tax rate is a named percentage — for example "Standard Rate (20%)" or "Zero Rate (0%)" — that Sales Scribe applies to invoice and purchase lines to work out VAT. This guide explains how to add, change and retire the rates your organisation uses.
Before you begin
- Go to Settings → Tax rates.
- You need the Manage tax rates permission. Everyone who creates documents can use your rates; only people with this permission can change what they mean.
- A starter set of rates is created for your organisation automatically, based on your country, so there is nothing you must set up before you start invoicing.
What a tax rate is made of
- A name — how it appears when you pick it, for example "Standard Rate".
- A percentage — the rate itself, stored to four decimal places.
- What it means — the accounting treatment (see below). This is the most important choice, because it decides how the rate is reported on your VAT return.
- Can be used on — sales, purchases, or both. This keeps your lists short: a purchase-only rate never appears on an invoice.
- Applies from / until — the dates the rate is in force. Leave both blank if it has always applied and has no planned end.
What a rate means
| Treatment | Choose it when |
|---|---|
| Taxable | An ordinary sale or purchase carrying VAT at the percentage you set. Your standard and reduced rates are both of this kind. |
| Zero rated | Taxable, but at 0% — food, books, children's clothing. The value still counts towards your VAT return turnover. |
| Exempt | No VAT is charged and none can be reclaimed — insurance, finance, most health and education. Still counted in your turnover. |
| Outside the scope of VAT | Money that is not payment for a supply at all — grants, donations, dividends, wages. It stays off the VAT return entirely. |
| Outside UK VAT — place of supply | A genuine sale or purchase that falls outside UK VAT because it takes place abroad, typically services for an overseas business customer. No VAT arises, but the value is still reported. |
| Reverse charge — services from abroad | Services you buy from a supplier abroad where you account for the VAT yourself instead of paying it to them. Purchases only. |
Zero-rated, exempt and outside-the-scope all show as 0% on a document, but they are not interchangeable — they are reported differently, so pick the one that describes the supply.
You choose from this list; you cannot invent a new treatment. What each one does to your VAT return is built into Sales Scribe so the figures stay right.
Setting your defaults
The Defaults panel at the top of the page sets the rate used on a new line when nothing more specific applies. Sales and purchases are set independently.
Defaults are only a starting point. A rate chosen on the line itself, or set on the product, category or supplier, always wins.
Adding a rate
Select Add tax rate, fill in the name, percentage and treatment, and save. If you choose a treatment that carries no VAT, the percentage is fixed at 0 for you.
Two rates can share a name only if their dates do not overlap — which is exactly what happens when one rate replaces another.
When a rate changes — for example VAT goes from 20% to 21%
This is the important one, and it is deliberately not an edit.
A rate that has been used on a document can never be changed. Your invoices record the tax they charged, and editing the rate would silently rewrite them. Instead, use Replace:
- Find the rate in the list and select Replace.
- Enter the new percentage, and the date the new rate starts applying.
- Check the panel on the right — it shows how many issued documents and drafts already exist on or after that date.
- Select Replace rate.
Sales Scribe then ends the old rate the day before the new one starts, and creates the new rate linked to it. The old rate stays exactly as it was on every document that used it, and your reports for earlier periods are unchanged. The old rate shows as Superseded in the list.
You can backdate a replacement — rate changes are often applied late. Nothing already issued is recalculated; the panel tells you what exists so the decision is an informed one.
If the rate was also your default, the new rate takes over as the default automatically.
Renaming a rate
Renaming and editing the description are always allowed, even on a rate that is in use — they are presentation, not accounting. Documents you have already issued keep the name they were issued with.
Archiving instead of deleting
- Archive withdraws a rate from the lists you choose from. It stays on every document that used it and keeps appearing in reports. Archived rates are listed at the bottom of the page and can be restored.
- Delete removes a rate completely, and is only possible when no document has ever used it — a rate you added by mistake, for example. If products, categories or suppliers still default to it, you will be asked to confirm that their tax rate should be cleared.
You cannot archive the rate currently set as a default; choose a different default first.
How rates appear on your documents
- On a sales document the rate produces output VAT — the VAT you charge your customer.
- On a purchase document it produces input VAT — the VAT you have been charged and may be able to reclaim.
The VAT calculated feeds the VAT Summary report and posts to the output and input VAT accounts set in your Accounting Settings.
Important notes
Need a one-off rate for a single line? You do not have to add it to your list. Any invoice or purchase line can take a custom rate or a fixed tax amount — see Add a custom tax rate to a line.
- Tax rates only produce VAT when your organisation is set to VAT registered. See VAT registration and territory.
- Every change is recorded in your audit trail, including who made it and when a replacement takes effect.
Running more than one organisation?
If several organisations should charge the same rates, you can set them up once and share them, instead of repeating this page in each one — see Share tax rates with a tax profile. Accountants can share a rate set across their clients the same way.