Line Level VAT

Set multiple VAT rates within the same contract for greater accuracy

Adam Bateman avatar
Written by Adam Bateman
Updated over a week ago

VAT for most construction work is charged at either 0% or 20% but there are exceptions, mixed-use schemes for example, where instead of a single tax rate there are multiple VAT rates for different elements of work.

With an ever-growing focus on ensuring VAT is calculated correctly before being paid to the HMRC (Domestic reverse charge) or to the subcontractor/consultant (where reverse charge is not applicable), Payapps now provides the ability to apply bespoke VAT rates at each line level.

NOTE: There are some significant changes to Payapps following the introduction of this feature, particularly with existing contracts where a blended default rate has been set, affecting the default VAT rate and assessment of variations.

Line level VAT - Contract Setup

Default VAT rate

To take advantage of the line level VAT, the default VAT rate will need to be set at one of the 3 standards rates listed below:

  • 20%

  • 5%

  • 0%

NOTE: Blended rates are still possible, but must be entered at a line level - read on for further information.

When your contract breakdown is imported, all lines will adopt the default VAT rate:

Any new line added to the contract:

...will also adopt this default VAT rate:

Contract Breakdown - change the VAT rate per line

In the contract breakdown section, there is a new column showing the VAT rate for each line:

Each line has the default rate but can be changed to any other standard rate from the dropdown (0%, 5%, 20%):

If a line item requires a non-standard rate, the value can be entered directly into the ‘VAT Rate’ field:

Once complete, the new rate will be available to select from the dropdown for other lines:

Variations Assessment:

Assessment of Original Works lines will continue in the usual manner. However there is an additional step for Variations where the VAT rate needs to be changed if it differs from the Default VAT Rate:

If you have any questions or require assistance please do not hesitate to contact support via:

Chat: In app
Phone: 0191 651 1765

Did this answer your question?