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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    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









    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.





















      up vote
      1
      down vote

      favorite









      up vote
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      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









      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









      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









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      leen3o is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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      edited 4 hours ago





















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      asked 4 hours ago









      leen3o

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      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.




















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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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            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
























              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






















                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












                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

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