This guide introduces you to the database's tax functions, where to add new tax statuses and how to apply these to your artwork records depending on its type. manual overrides.
- Tax code setup: Set up the tax codes that apply to the works you sell, including the appropriate labels that you'd like to be shown after prices when the prices are displayed with or without tax.
- Applying tax codes to an artwork: Set a tax code for every artwork, even if the tax code is a value like ‘TBC’.
1. Tax code setup
Go to Accounts > Value Lists > Tax statuses
On the list screen, you will find all your Tax codes and can click the pencil to edit them.
Opening up a record here will allow you to edit the name, tax rate and two custom price label values for when you are displaying prices inclusive or exclusive of tax.
The default values in the system include TBC, Temporary Admission, Margin scheme, Zero rated, Rated/ Standard rate. It is important to make sure you label your values in a way that ensures they suit your workflow if this code is selected.
Tax status definitions
The UK Margin Scheme for works of art allows participating dealers and galleries to reduce the selling price for eligible works by means of reduced tax.
Check this box if the price should always be displayed including tax on invoices. Artwork records with this tax status will have a 'Selling price' field added, for the price including tax. The sales price will be displayed including tax in accounts records and exports and in the 'Sale price' field of the artwork record. This is automatically selected for margin scheme tax statuses.
Changing this for tax statuses that have already been used in invoices may lead to discrepancies in your accounts records - we suggest creating a new tax status instead.
Hide tax in invoices
Check this box if you don't want the tax rate or tax amount to show on invoices. This is automatically selected for margin scheme tax statuses.
Custom text to display on the invoice, above the invoice terms. This will be displayed regardless of whether 'Hide tax in invoices' is checked.
2. Applying tax codes to an artwork
Set the tax code of an artwork in the record's ‘Financial’ tab by selecting the appropriate value from the menu. You can find this in the ‘Retail price and tax’ section. This process is different for works on the Margin scheme.
Make sure that the tick box 'Automatically apply rate for selected tax status' is ticked (it is on by default for new records). If you want a non-standard rate for the status you have selected, you should uncheck this box and enter your chosen tax rate in the box that appears in order to apply a different tax rate to the tax-inclusive price.
You can use the Update multiple function to set your available artworks to the relevant tax statuses in just a few actions.
Optionally, you can override a particular artwork (despite its tax code) and vary the label, tax rate, currency, amount and label by setting specific custom display prices for individual artworks.
It is possible to override the specific price labels for artworks and replace the price and label by checking the ‘Override display price’ box and entering your override options for prices including or excluding tax.