Environment Tax

This setting is part of the feature that allows you to add an environment tax to your Invoices (e.g. a tax on packaging), or any tax based on the Weight of the Items on an Invoice. If you need to add an environment or other tax based on the value of the Items sold, do not use this setting and instead refer to flip B of the VAT Codes setting in the Nominal Ledger.

To use this feature, follow these steps:

  1. Create a new Plain Item to represent the environment tax. The purpose of this Item is to allow you to specify the Account that will be credited with environment tax from each Invoice (in the Sales A/C fields for each Zone) and the VAT Codes (again, for each Zone) that you want to be used with environment tax.

  2. Open the Environment Tax setting in the Sales Ledger and enter the Item Number of the Item from step 1.

  3. In the Environment Tax per Kilo field on the 'Stock' card of each Item record, specify how much tax is to be charged when the Item is sold, and enter the Weight on the 'Warehouse' card:

    In this example, the environment tax is 2.00 per kilo and the Weight is 3.00 kg, so 6.00 per unit will charged as environment tax whenever you sell the Item.

  4. When you sell each Item, the environment tax will be shown on flip F of each Invoice row:

  5. When the Invoice is complete, choose 'Add Environment Tax' from the Operations menu. A new row is added to the Invoice, with the Item from the Environment Tax setting, and the Sales Account and VAT Code from that Item. The Value of the environment tax will be added to the Invoice totals:

    If you find the Invoice is not correct, remove the row with the environment tax, correct the Invoice, then select 'Add Environment Tax' again.

  6. If you have a Customer that is not to be charged environment tax, tick the No Environment Tax box on the 'Terms' card of the Contact record for the Customer. When you enter an Invoice for such a Customer and use the 'Add Environment Tax' function, the environment tax row will be added to the Invoice, but with a 100% discount.

Settings in the Sales Ledger:

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