I need clarification on the tax type codes in Pastel Xpress.
If a supplier is not VAT registered then 00 (type 0) should be used.
If a supplier is VAT registered then 01 (VAT standard tax rated 14%) is used.
If a supplier is VAT registered but has non-VAT items on the tax invoice (sometimes we encounter this with flight tickets, etc) then should the amount which doesn't attract VAT be processed under 03 (Exempt 0%)?
As we are registered for VAT we bill all our clients at 01 (VAT standard tax rated 14%).
However, how does it work when recovering travel expenses from clients (flights, car hire, accommodation)? These costs do not form part of our core business offering and we merely wish to have them covered by the client. Should we invoice them exactly the same way that the supplier invoices us? Currently, if we charge clients a rate per km travelled we add VAT @ 14% onto that.
Any assistance, please.