12-10-2015, 03:04 AM,
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daveparrish
Senior Member
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Posts: 140
Threads: 63
Joined: Mar 2015
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RE: Taxable items
(12-09-2015, 01:25 PM)phil Wrote: A silly thought, perhaps you could do this by having the item sold under 2 codes. One of which is an assembly item with it's only component this item.
Each of the two items are set up as belonging to different tax categories - so they are taxed differently.
Phil
Thanks for the help sounds like a good solution, but when I go to setup an item there is no place to add the components it may be a setting in the setup I am not seeing.
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12-10-2015, 08:20 PM,
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TimSchofield
Tim Schofield
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Posts: 1,318
Threads: 22
Joined: Mar 2015
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RE: Taxable items
Does this not highlight a flaw in the logic? If you are selling a kit made up of taxable and non taxable items, and there isn't one "principal item" the items should be be taxed on a line by line basis?
In the UK and the wider European Union the following directive applies to VAT on kit items:.
"1 In the case of a multiple supply, each constituent element of the transaction is treated as an individual supply for VAT rating purposes. The taxable person must apportion the consideration payable by the customer between all the constituent elements supplied, thereby ensuring that the appropriate rate of VAT is applied to each portion of the consideration payable. In this regard the VAT Act requires that the total consideration be apportioned in a way that correctly reflects an accurate ratio of the values involved. The taxable person must be able to demonstrate, on request, to the satisfaction of Revenue that the result of the apportionment calculation is reasonable. Acceptable apportionment methods would include, for example, splitting the consideration according to the ratios of the cost of supplying each element, or according to the market value of each element.
2 In the case of a composite supply there is one principal element or supply to which any other element or elements are ancillary. A single rate of VAT applies to the entire transaction at the rate applicable to the principal supply."
Tim
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