If you’re on the Cash Accounting VAT Scheme, you can choose to set a VAT default for transactions that have the category ’Revenue’. You set this default in your VAT settings, in the Online Bank. This means that when money comes into your account, if that transaction has the category “Revenue”, we automatically set the default VAT percentage on the transaction, which will then feed into your VAT calculation. You can manually override this VAT amount for each transaction, in the Online Bank. If you match that transaction to an invoice, the actual VAT amount on the invoice will override the default VAT percentage.

If you’re on the Flat Rate Scheme, any transactions that have the category “Revenue” or “Other income” will have the flat rate in your VAT settings applied, which will automatically feed into your VAT calculation.

We do not apply any automated VAT amounts for transactions with expense categories assigned. You’ll need to input the VAT amount manually.