We understand that in the UK, the majority of products and services purchased and sold are inclusive of VAT. As such, Ivy’s inclusive/exclusive tax feature ensures that items bought and sold are done so with the necessary tax settings taken into account.

How does it work? It starts with your account settings and profile preferences. Access your account settings by clicking on the initials listed in the top right-hand corner of your account, and click on My Account. Next, click on the Sales Tax tab. 

Here, you can set default tax settings for your account. These settings include:

By default, all of these settings are turned on. This means that all products and services are default taxable, and default inclusive of tax at the standard and reduced rates, respectively. 

This also means that by default your client-facing documents will show pricing inclusive of tax. This applies to proposals and invoices, as well as PDFs or spec sheets created from proposals and invoices.

*If you started using Ivy prior to December 8, 2019, your default account settings for client-facing documents will be exclusive. Here’s how you can easily change your account settings to be inclusive for client-facing documents.

In order to understand how to indicate that products/services added to your Ivy account are inclusive of VAT, it’s important to know how to add products and services to your account.

From the Ivy Clipper:

If your account settings indicate that all account products are by default inclusive of VAT, any product that you clip using the Ivy clipper will assume cost added is inclusive of VAT.

From the product library:

Upon adding a product to the product library, according to your account settings, the product cost will indicate that it is inclusive of tax, indicated by the checked “Inclusive” box. When an item’s inclusive VAT cost is entered, you will see the exclusive unit cost listed below. Ivy calculates the exclusive unit cost of the item based on the VAT rate you have selected upon entering the item to your library. By default, the rate from your account settings is selected.  

While adding a product to your library, you can choose to override your default account tax settings and indicate that the item does not include VAT by unchecking the “Inclusive” box, and you may also change the tax rate associated with the item by selecting a different amount in the dropdown menu.

Upon adding an item inclusive of VAT to your product library, you will notice that the cost listed is exclusive of VAT. Simply hover over the t icon next to the cost, and you'll see a breakdown of the unit cost and VAT, which equals the total cost of the item.

The same principle applies to services added to your products/services library. Any service added will show your inclusive cost broken down to the exclusive unit cost, and you have the ability to override default settings by indicating whether the item is inclusive/exclusive of tax, and at which rate.
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Here's what it looks like in your services library once saved:

If you’ve opted to display inclusive pricing on client-facing documents, your clients will see pricing per line item, inclusive of VAT. This will be explicitly noted on the document, “Rate (incl. VAT).” 

The total cost without VAT will appear at the bottom of the document as noted, “Total before VAT.” This is followed by the VAT, and then the total amount of the proposal or invoice.

If you’ve opted to display exclusive pricing on client-facing documents, your clients will see a product or service’s exclusive cost on the line item. Ivy will then calculate and show VAT as a total per document, rather than per line item. This will be explicitly noted on the document, “Rate (excl. VAT).”

The total cost without VAT will appear at the bottom of the document as noted, “Total before VAT.” This is followed by the VAT, and then the total amount of the proposal or invoice.

Items added to your library as exclusive of VAT will not show a VAT amount on the item in the product library. VAT will only be added on a document level, at which point you can select the VAT rate to associate with the item.
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Need more help? Contact us at support@ivy.co.