The Tax Summary report shows the total tax breakdown for your income and expenditure items. This may be useful for preparing your VAT returns, and working out how much tax you have to pay.

To view the tax summary report, select Reports->Tax Summary from the main menu, as shown in figure 7.3.1.

Figure 7.3.1 - Accessing the Tax Summary Report

This will take you straight to the report, as illustrated in figure 7.3.2.

Figure 7.3.2 - Tax Summary Report

In the UK, there are a number of different VAT schemes, and undoubtedly each country has its own idiosyncrasies when it comes to calculating, reporting on, and paying sales tax. The tax summary report offers 2 alternatives for performing the calculations:

1) Report on the amounts that are due to be paid to you, based on the invoices you have raised - regardless of whether or not the invoices have been paid (this is the default scheme in the UK).

2) Report only on the actual income received, regardless of any invoices that are due but have not been paid (this is an optional scheme in the UK for qualifying small businesses only).

You can choose option 1 by setting 'Include Unpaid Invoices?' to 'yes', or use option 2 by setting it to 'no'. The value you select is stored in a cookie, and automatically selected next time you run the report.

Remember to set the date range according to the period you want to report on (you can select a pre-defined period, such as 'previous quarter', or specify a date range yourself by selecting 'Specified Date Range' and then using the calendar controls to define the start and end dates). By default, the dates are set to the 1st of the previous month up until the current date. The figures that appear in the report are calculated as follows:

If 'Include Unpaid Invoices?' is set to 'yes':

Tax Breakdown - Income

Total Taxable Income Due

This is the sum of the net total for each invoice that is dated within the given date range for which an element of tax was present, plus the sum of the net total (ie. after subtracting the tax element) of any income items in the given date range that were not associated with an invoice, and had a tax element present, and were not set to be excluded from the report.

Total Non-Taxable Income Due

This is the sum of the total for each invoice that is dated within the given date range for which no tax was present, plus the sum of the total of any income items in the given date range that were not associated with an invoice, and did not have a tax element, and were not set to be excluded from the report.

Total Net

The sum of the above 2 figures.

<Tax> @ <Rate>%

A list of the different tax rates that were used in invoices and non-invoice-related income records during the given date range, with the total amount of tax applied for each rate.

Total <Tax>

The sum of the amounts charged for tax at each tax rate. If only one tax rate has been used, this will be the same as the figure above (<Tax> @ <Rate> %), otherwise it is the sum of all of the tax figures.

Gross Total

The total income due from invoices raised during the given date range, plus from non-invoice-related income during the given date range, that were not set to be excluded from the report, including tax. This should equal the sum of Total Net and Total <Tax>.

Tax Breakdown - Expenditure

Total Taxable Expenditure

The sum of the net total of all credit notes that are dated within the given date range, for which an element of tax was present, plus the sum of the net total of any invoices that were marked as 'written off' and that had an element of tax, with a written off date within the given date range, and which were marked as requiring the tax to be reclaimed, plus the sum of the net total of any expenditure records for which an element of tax was present and that were not related to any credit notes, and that were not set to be excluded from the report.

Total Non-Taxable Expenditure

The sum of the total for each credit note that is dated within the given date range, for which no tax was present, plus the sum of the total of any invoices that were marked as 'written off' and that had no tax, with a written off date within the given date range, and which were marked as requiring the tax to be reclaimed (even though no tax was present), plus the sum of the total of any expenditure items in the given date range that were not associated with any credit notes, and that were not set to be excluded from the report.

Total Net

The sum of the above 2 figures.

<Tax> @ <Rate>%

A list of the different tax rates that were used in credit notes, written off invoices and non-credit-note-related expenditure records during the given date range, with the total amount of tax applied for each rate.

Total <Tax>

The sum of the amounts of tax paid out at each tax rate. If only one tax rate has been used, this will be the same as the figure above (<Tax> @ <Rate> %), otherwise it is the sum of all of the tax figures.

Gross Total

The total expenditure for credit notes raised during the given date range, plus from invoices that were written-off during the given date range, plus from non-credit-note-related expenditure during the given date range, that were not set to be excluded from the report, including tax. This should equal the sum of Total Net and Total <Tax>.

If you have any invoices that were written off during the given date range, you will see another section underneath the expenditure, showing the totals for the written off invoices. In the overall summary that follows, written off invoices are treated as expenditure (thus allowing you to claim back the tax that you were unable to collect).

If 'Include Unpaid Invoices?' is set to 'no':

Tax Breakdown - Income

Total Taxable Income

The sum of the net total (ie. after subtracting the tax element) of all income items in the given date range that have an element of tax present, and were not set to be excluded from the report (regardless of whether or not the income items were associated with invoices).

Total Non-Taxable Income

The sum of the total of all income items in the given date range that do not have any tax element, and were not set to be excluded from the report (regardless of whether or not the income items were associated with invoices).

Total Net

The sum of the above 2 figures.

<Tax> @ <Rate>%

A list of the different tax rates that were used in income records during the given date range, with the total amount of tax applied for each rate (regardless of whether or not the income items were associated with invoices).

Total <Tax>

The sum of the amounts charged for tax at each tax rate. If only one tax rate has been used, this will be the same as the figure above (<Tax> @ <Rate> %), otherwise it is the sum of all of the tax figures.

Gross Total

The total all income records, that were not set to be excluded from the report, during the given date range, including tax. This should equal the sum of Total Net and Total <Tax>

Tax Breakdown - Expenditure

Total Taxable Expenditure

The sum of the net total of all expenditure records for which an element of tax was present, regardless of whether or not they were related to any credit notes, and that were not set to be excluded from the report.

Total Non-Taxable Expenditure

The sum of the total of any expenditure items in the given date range, regardless of whether or not they were associated with any credit notes, and that were not set to be excluded from the report.

Total Net

The sum of the above 2 figures.

<Tax> @ <Rate>%

A list of the different tax rates that were used in expenditure records, regardless of whether or not they were related to any credit notes, during the given date range, with the total amount of tax applied for each rate.

Total <Tax>

The sum of the amounts of tax paid out at each tax rate. If only one tax rate has been used, this will be the same as the figure above (<Tax> @ <Rate> %), otherwise it is the sum of all of the tax figures.

Gross Total

The total amount paid out for expenditure items during the given date range, regardless of whether or not they were associated with any credit notes, that were not set to be excluded from the report, including tax. This should equal the sum of Total Net and Total <Tax>.

SUMMARY (for tax purposes only)

The box at the end shows a summary of the profit/loss from a tax perspective. As there may be items that were excluded from the report, this should not be relied on as a true figure for the amount of profit made during the given date range - unless there are no excluded items. It can, however, be used to help you fill in your VAT return (or equivalent).

Gross Profit (or Loss)

This is the Gross Total figure from the Income section, less the Gross Total figure from the Expenditure section. If the result is negative, the amount is shown in red, with brackets.

Total Tax Payable (or Rebate Due)

The Total Tax from the Income section, less the Total Tax from the Expenditure section. If the result is negative, the amount is shown in red, with brackets, and probably means that you are owed a tax rebate. If the result is positive, it is shown in black, without brackets, and probably means this is the amount of tax you must pay.

Net Profit (or Loss)

The Total Net from the Income section, less the Total Net from the Expenditure section. If the result is negative, the amount is shown in red, with brackets.

Following the summary, is a link which says 'Click here for a list of items that have been excluded from this report'. Clicking on this link opens a popup window showing the items that were not included in the above figures.

Excluded Items

This popup window displays the details of any items that have been excluded from the report.

If 'Include Unpaid Invoices?' is set to 'yes', the popup will only show income and expenditure records that are set to be excluded from the report if they are not related to any invoices/credit notes (as the invoice/credit note itself would be included in the main report), and a list of any written off invoices that were excluded (due to the written off invoice record stating that you do not want to the reclaim tax) is also displayed.

If 'Include Unpaid Invoices?' is set to 'no', all income and expenditure records that are set to be excluded from the report will be shown here, regardless of whether or not they relate to any invoices or credit notes, but written off invoices are not shown (as they would not have been included in the report in the first place at the time they were raised).

For each income, expenditure, or invoice record that appears on the popup, you can click on the link provided to view or edit the record. When you do this, the main window is redirected to the editor for the selected record, while the popup window stays where it is. When you either save or cancel the editor in the main window, you are redirected back to the tax summary report (rather than the income, expenditure, or invoice list). If you have amended an income or expenditure item to set it not to be excluded, the popup window will not reflect this change until you close it down and open it again.

On the main report, there is also a choice of 2 printer-friendly links which will open a new window with a reduced-formatting version of the report either fully expanded (showing details of what goes into each total) or collapsed (showing just the totals).