Post tax to its own line and its own Xero account

If your store charges VAT, GST or another sales tax and Xero shows it inside your sales instead of on its own line, this is the fix. Choosing a tax type such as BAS Excluded or No Tax for your sales changes how Xero reports a line, but it does not take the tax out of the amount. When your prices include tax, the whole price, tax included, lands in your sales account.

On a normal synced invoice the tax sits on the product and shipping lines themselves. Xero works it out from the tax rate on each line, shows a single tax total at the foot of the invoice, and books it through whichever account that rate is set up to use. Some businesses need the tax to be a line of its own on the invoice, and to land in a particular liability account rather than the one sitting behind the tax rate. That's something we set up per store.

How it Works

The product and shipping lines post with no tax on them, and one extra line is added carrying the tax for the whole order. That line goes to the Xero account you nominate, and is labelled Tax unless you'd like different wording — VAT and GST are the usual requests.

The invoice total doesn't change. If your prices already include tax, the product lines come down by the tax that was sitting inside them, and exactly that amount reappears on the tax line, so the invoice still adds up to what the customer paid.

For example, say a customer pays 120.00 and 20.00 of that is tax. Without this, the full 120.00 posts to your sales account. With it, 100.00 posts to your sales account and 20.00 posts to your tax account. The invoice total is 120.00 either way.

Duties are treated the same way and go to the same account, unless you've asked for a separate one — Setting a duties/tariffs account and tax type covers that. Refunds follow the invoice: when a credit note is raised, the tax comes back off the same account it went to, so the two net off.

Several Countries

Once it is on, the tax line applies to every order from your store. If you sell into several countries and each one's tax needs its own account, that can be set per destination country rather than one account for everything.

If the tax line is only right for some countries, we can add it for the countries you list and leave every other order exactly as it posts today. That suits a store that charges UK VAT on UK orders but should keep GST on its home-country orders.

Can I Turn This on Myself?

No. There is no setting for it in the app, so there is nothing to change in Setup - Advanced or anywhere else. We switch it on for your store once we have the details below.

How to Request Setup

Have these ready, then email us at help@hyvelabs.co. The link opens an email with the questions already filled in.

1. The account the tax should post to. If you don't have one yet, create it in Xero first and send us its account code.
2. Your shop URL.
3. The wording you want on the line, such as VAT or GST. If you skip this, the line is labelled Tax.
4. The countries the tax line should cover, and whether you also sell in countries where it should not apply.

This changes how invoices are built from the point we switch it on. Invoices already in Xero keep the shape they were posted with.