How to deal with discount when invoice has multiple line items and multiple tax rates?

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I am stumped at how to work out the tax for an invoice, when discounts are applied to invoices that have multiple line items with multiple tax rates? See my example invoice below:

SomeItemOne(Tax: 20%) - Cost:£2.45 | Qty:1 (Line Sub Total: £2.45) 
SomeItemTwo(Tax: 20%) - Cost:£22.45 | Qty:5 (Line Sub Total: £112.25) 
SomeItemThree(Tax: 10%) - Cost:£68.99 | Qty:4 (Line Sub Total: £275.96) 
SomeItemFour (Tax: 0%) - Cost:£68.99 | Qty:4 (Line Sub Total: £275.96) 

This would give me an invoice breakdown of:

Subtotal: £666.62
Tax (20% of 114.70): £22.94
Tax (10% of 275.96): £27.60
Tax (0% of 275.96): £0
Total: £717.16

I now need to offer a 50% discount on this invoice. How is this calculated with multiple tax rates?

I can't just take 50% off the Subtotal? As I won't be able to correctly calculate the different tax rates?

taxes vat discounting

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edited 4 hours ago

asked 4 hours ago

leen3o

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up vote
1
down vote

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I am stumped at how to work out the tax for an invoice, when discounts are applied to invoices that have multiple line items with multiple tax rates? See my example invoice below:

SomeItemOne(Tax: 20%) - Cost:£2.45 | Qty:1 (Line Sub Total: £2.45) 
SomeItemTwo(Tax: 20%) - Cost:£22.45 | Qty:5 (Line Sub Total: £112.25) 
SomeItemThree(Tax: 10%) - Cost:£68.99 | Qty:4 (Line Sub Total: £275.96) 
SomeItemFour (Tax: 0%) - Cost:£68.99 | Qty:4 (Line Sub Total: £275.96) 

This would give me an invoice breakdown of:

Subtotal: £666.62
Tax (20% of 114.70): £22.94
Tax (10% of 275.96): £27.60
Tax (0% of 275.96): £0
Total: £717.16

I now need to offer a 50% discount on this invoice. How is this calculated with multiple tax rates?

I can't just take 50% off the Subtotal? As I won't be able to correctly calculate the different tax rates?

taxes vat discounting

share|improve this question

edited 4 hours ago

asked 4 hours ago

leen3o

1154

New contributor

leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

add a comment | 

up vote
1
down vote

favorite

up vote
1
down vote

favorite

I am stumped at how to work out the tax for an invoice, when discounts are applied to invoices that have multiple line items with multiple tax rates? See my example invoice below:

SomeItemOne(Tax: 20%) - Cost:£2.45 | Qty:1 (Line Sub Total: £2.45) 
SomeItemTwo(Tax: 20%) - Cost:£22.45 | Qty:5 (Line Sub Total: £112.25) 
SomeItemThree(Tax: 10%) - Cost:£68.99 | Qty:4 (Line Sub Total: £275.96) 
SomeItemFour (Tax: 0%) - Cost:£68.99 | Qty:4 (Line Sub Total: £275.96) 

This would give me an invoice breakdown of:

Subtotal: £666.62
Tax (20% of 114.70): £22.94
Tax (10% of 275.96): £27.60
Tax (0% of 275.96): £0
Total: £717.16

I now need to offer a 50% discount on this invoice. How is this calculated with multiple tax rates?

I can't just take 50% off the Subtotal? As I won't be able to correctly calculate the different tax rates?

taxes vat discounting

share|improve this question

edited 4 hours ago

asked 4 hours ago

leen3o

1154

New contributor

leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

I am stumped at how to work out the tax for an invoice, when discounts are applied to invoices that have multiple line items with multiple tax rates? See my example invoice below:

SomeItemOne(Tax: 20%) - Cost:£2.45 | Qty:1 (Line Sub Total: £2.45) 
SomeItemTwo(Tax: 20%) - Cost:£22.45 | Qty:5 (Line Sub Total: £112.25) 
SomeItemThree(Tax: 10%) - Cost:£68.99 | Qty:4 (Line Sub Total: £275.96) 
SomeItemFour (Tax: 0%) - Cost:£68.99 | Qty:4 (Line Sub Total: £275.96) 

This would give me an invoice breakdown of:

Subtotal: £666.62
Tax (20% of 114.70): £22.94
Tax (10% of 275.96): £27.60
Tax (0% of 275.96): £0
Total: £717.16

I now need to offer a 50% discount on this invoice. How is this calculated with multiple tax rates?

I can't just take 50% off the Subtotal? As I won't be able to correctly calculate the different tax rates?

taxes vat discounting

taxes vat discounting

share|improve this question

edited 4 hours ago

asked 4 hours ago

leen3o

1154

New contributor

leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

share|improve this question

edited 4 hours ago

asked 4 hours ago

leen3o

1154

New contributor

leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

share|improve this question

share|improve this question

edited 4 hours ago

edited 4 hours ago

edited 4 hours ago

asked 4 hours ago

leen3o

1154

New contributor

leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

asked 4 hours ago

leen3o

1154

asked 4 hours ago

leen3o

1154

1154

New contributor

leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

New contributor

leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.

add a comment | 

add a comment | 

1 Answer
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Apply the discount before you apply the tax (unless your specific tax jurisdiction calls for the tax to be applied to the pre-discount value - NOTE that this would not be normal in the USA/EU). Then calculate the tax normally on the now-discounted pricing.

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answered 4 hours ago

GOATNine

1,217215

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1 Answer
1

active

oldest

votes

1 Answer
1

active

oldest

votes

active

oldest

votes

active

oldest

votes

up vote
4
down vote



accepted

Apply the discount before you apply the tax (unless your specific tax jurisdiction calls for the tax to be applied to the pre-discount value - NOTE that this would not be normal in the USA/EU). Then calculate the tax normally on the now-discounted pricing.

share|improve this answer

answered 4 hours ago

GOATNine

1,217215

add a comment | 

up vote
4
down vote



accepted

Apply the discount before you apply the tax (unless your specific tax jurisdiction calls for the tax to be applied to the pre-discount value - NOTE that this would not be normal in the USA/EU). Then calculate the tax normally on the now-discounted pricing.

share|improve this answer

answered 4 hours ago

GOATNine

1,217215

add a comment | 

up vote
4
down vote



accepted

up vote
4
down vote



accepted

Apply the discount before you apply the tax (unless your specific tax jurisdiction calls for the tax to be applied to the pre-discount value - NOTE that this would not be normal in the USA/EU). Then calculate the tax normally on the now-discounted pricing.

share|improve this answer

answered 4 hours ago

GOATNine

1,217215

Apply the discount before you apply the tax (unless your specific tax jurisdiction calls for the tax to be applied to the pre-discount value - NOTE that this would not be normal in the USA/EU). Then calculate the tax normally on the now-discounted pricing.

share|improve this answer

answered 4 hours ago

GOATNine

1,217215

share|improve this answer

share|improve this answer

answered 4 hours ago

GOATNine

1,217215

answered 4 hours ago

GOATNine

1,217215

answered 4 hours ago

GOATNine

1,217215

1,217215

add a comment | 

add a comment | 

leen3o is a new contributor. Be nice, and check out our Code of Conduct.

 

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