Manage VAT easily

Automatically calculate VAT on transactions, and use reports to prepare VAT returns.

Sales tax

Customise VAT rates

Set up as many VAT rates as you need.

Automated calculations

VAT on transactions is recorded for you.

Prepare VAT returns

Use the sales tax report to complete a return.

Customise VAT rates

Default VAT rates are set up, initially to 0%, for tax on purchases, sales, and imports, and tax exempt.

  • Add or amend the default tax rates
  • Set up as many tax rates and components as required
  • Alter the tax rate on any line item if needed
A list of tax rates in the Xero application, with the 'Tax exempt' and 'Tax on goods' options highlighted.

Automated calculations

Calculate VAT on each line item in your invoices, quotes, purchase orders and bills.

  • The tax rate selected for each item is used to calculate sales tax
  • Sales tax on a transaction can be tax inclusive or exclusive, or no tax
  • Set up default rates for contacts, inventory items, and accounts
A consultant speaks to a client, with the tax rate option 'Tax on consulting' highlighted.

Prepare VAT returns

Run the sales tax report to gather information for completing VAT forms for a selected tax period.

  • Get a summary of taxes by rate, component or account type
  • View an audit report to see the individual transactions
  • Sales tax figures can be generated using the cash or accrual basis
The sales tax summary report in Xero, with a summary of taxes by tax component.

Start using Xero for free

Access all Xero features for 30 days, then decide which plan best suits your business.

  • Safe and secure
  • Cancel any time
  • 24/7 online support

Xero became a really critical tool for us as we took on more staff.

Kate uses Xero to run her business

Kate from Lune uses Xero to run her business