Taxes

Define each tax rate once, attach it to the products it applies to, and Flexie does the maths everywhere: quotes, invoices, accounting.

What a tax is

A tax is a named rate (with a rate type) plus a few labels that help you keep your books straight. You set it up once, then attach it to the products that should charge it.

Examples:

• VAT 20%, the standard UK VAT rate.
• Sales Tax (CA) 7.25%, California sales tax.
• GST 5%, Canadian goods and services tax.
• Reverse-charge VAT, a 0% rate used for B2B EU exports.

You can have as many taxes as you need.

Creating a tax

Click New on the taxes list.

Field	What it does
Name	Display name, what appears on quotes and invoices (e.g. "VAT 20%").
Rate type	Percentage (typical, e.g. 20%) or Fixed (a flat amount per line, e.g. an environmental levy of £5).
Rate	The actual rate, 20 for 20%, or the flat amount for a fixed-rate tax.
Tax type	Sales (a tax you charge customers) or Purchase (a tax you pay suppliers). The two are kept separate in your books.
Tax class	Domestic, Export, or EU. Used to keep cross-border taxes separate for reporting. Pick Domestic if you only sell in one country.
Tax code	A short identifier, useful for tax-authority reporting or matching against codes your bookkeeper uses.
Description	Optional, internal notes.

Where the money goes

Field	What it does
Sales tax account	The account in your chart of accounts where this tax's output (sales tax owed) is recorded.
Purchase tax account	(For purchase taxes) Where input tax (claimable) is recorded.

If you leave these blank, Flexie uses your default tax accounts. Most accounts set these once during initial configuration.

Tax-inclusive vs. tax-exclusive pricing

This isn't set on the tax itself, it's set on the product (see Products → Tax). The same tax (e.g. VAT 20%) can be used by inclusive-priced products and exclusive-priced products at the same time.

Pricing style	What you type as the product price	What appears on the line
Tax-exclusive	The pre-tax price (£100)	Subtotal £100 + tax £20 = total £120
Tax-inclusive	The all-in price (£120)	Subtotal £100 + tax £20 = total £120

Either way, the tax total is the same. The difference is just which number you wrote down as the Price.

How a tax flows through

When a line item uses a product with a sales tax:

1. On the quote / invoice line: Flexie computes the tax amount for that line (based on the line subtotal and the tax rate, with inclusive / exclusive handling).
2. In the totals block: taxes are summed and shown as a line, Subtotal £500.00 / Tax £100.00 / Total £600.00.
3. On invoice finalisation: Flexie posts a journal entry that credits your Sales tax account for the tax amount (so you know what you owe the tax authority).
4. When you pay the tax authority: you record that as a payment against the Sales tax account, which clears the liability.

The first three steps happen automatically. Only the fourth needs manual recording, since paying the tax authority is a real-world event Flexie can't see.

Common patterns

One country, one tax

Most small businesses have a single sales tax (e.g. VAT 20%, GST 5%). Configure that one tax, set it as the default on every product, and you're done.

Multiple rates in one country

Sales tax can differ by product type, e.g. food at 0%, books at 5%, everything else at 20%. Configure each rate as a separate tax, and attach the right one to each product (or each product category).

Tax-exempt customers

Some customers (e.g. registered charities, B2B with valid EU VAT numbers) are tax-exempt. Two approaches:

• Override per line on the invoice. Add the line with no tax, this works for one-off cases.
• Mark the customer as tax-exempt. When customer-level tax-exemption is configured, lines for that customer get the tax removed automatically. Ask your administrator if you need this set up.

Cross-border sales

If you sell to several countries:

• Use the Tax class field to keep Domestic, Export, and EU taxes separate.
• Define separate taxes per region you sell into.
• Map each tax to its own account in the chart of accounts so your books reflect each jurisdiction cleanly.

Compound taxes (tax on tax)

A few jurisdictions have taxes that apply on top of other taxes (e.g. a provincial tax that's calculated on the price plus federal tax). Flexie supports this: when defining a tax, you can mark another tax as its parent, and the rate will compound.

This is a niche case; most teams don't need it. Don't enable it unless your bookkeeper has explicitly told you the local tax works this way.

Gotchas

• Once a tax is on a line, it stays on the line. Editing the tax's rate later doesn't change quotes or invoices that already exist, they keep the rate that was applied at the time. If a rate change is retroactive (rare), you'd need to revise the affected documents.
• Tax-exclusive is the safer default. If you're not sure whether your customers expect tax-inclusive or tax-exclusive prices, go with exclusive, it's clearer where the tax is and reduces "wait, why did the total change?" questions.
• Fixed-amount taxes don't scale. A fixed £5 environmental levy gets applied as £5, regardless of the line subtotal. If you want it to scale with quantity, the line's quantity does it automatically, 2 × line with £5 levy = £10 levy.
• Sales vs. purchase taxes can't be mixed. A sales tax can't appear on a purchase line and vice-versa. They land in different accounts and report differently.

Next

• Quotes: where taxes first show up on a customer-facing document.
• Invoices: where taxes become real money owed.
• Accounting: where the tax amounts land in your books.