Which customer VAT type and stock item VAT rate should I use?

VAT is calculated as a function of both Customer VAT Type and Stock Item VAT Rate so in simple terms:

  • If the Customer VAT Type is ‘UK Standard’ then the application will look at the Stock Item VAT Rate to decide how much VAT to charge;
  • If the Customer VAT Type is UK Zero Rate e.g. for a new build construction, then it will over-ride the Stock Item VAT Rate and charge zero VAT;
  • If the Customer VAT Type is EU Export then the application will look for a VAT Number on the Customer account record and if present charge no VAT, but if not present, charge VAT at the Stock Item VAT Rate;
  • If the Customer VAT Type is Non EU Export, then no VAT is charged.