VAT

VAT Invoice with Different VAT Rates per Item

Apply a separate VAT rate to each line item and calculate the net amount, VAT and invoice total automatically.

For a VAT invoice with multiple rates, assign the appropriate rate to each line item rather than forcing one percentage across the whole document. The form then calculates net, VAT and gross totals.

Mixed invoices become error-prone when totals are calculated in a separate spreadsheet and pasted into a document. Quantities change, one item uses another rate, and a one-penny rounding difference appears between the lines and summary. Keeping the item data and calculation together makes the result easier to review.

The software applies the percentage you choose; it does not classify the supply. VAT rates and invoice requirements depend on the actual goods, services and circumstances. Use HMRC guidance or professional advice to determine the correct treatment before relying on the calculation.

Create a VAT invoice

Create a VAT invoice with different rates

Decide first whether your source prices are net or VAT-inclusive. That single setting changes how every line is interpreted.

  1. 1

    Enable VAT and choose price mode

    Set the invoice to use VAT, then select whether unit prices are entered before VAT or already include it.

  2. 2

    Build each line item

    Enter a useful description, quantity, unit price and the verified VAT rate for that particular item or service.

  3. 3

    Review the breakdown

    Check line totals, net subtotal, VAT grouped by rate and the final amount due. Preview the PDF before sending it.

A simple mixed-rate calculation

Suppose an invoice has one line with a £100 net value at a sample 20% rate and another with a £50 net value at a sample 5% rate. The form calculates £20 and £2.50 VAT respectively, producing £150 net, £22.50 VAT and £172.50 gross.

Those rates are only an arithmetic illustration, not advice about how a real product should be classified. On a live invoice, use the rate supported by your tax records. If you start from VAT-inclusive retail prices, switch the invoice to gross price entry so the form extracts the net and VAT instead of adding tax again.

  • Line A: £100 net, sample 20% VAT, £120 gross.
  • Line B: £50 net, sample 5% VAT, £52.50 gross.
  • Invoice: £150 net, £22.50 VAT, £172.50 due.

Net prices versus VAT-inclusive prices

When prices are net, the entered unit price is the taxable base and VAT is added. When prices include VAT, the entered figure is the customer-facing gross price and the calculation separates it into net and tax. Entering £120 under the wrong mode can therefore produce a materially different total.

Use one price mode consistently for the invoice. If a supplier list is net but a retail list is gross, convert the source figures before combining them. After switching mode on a draft, recheck every amount rather than assuming the visible total has preserved your intended price.

  • Quantity multiplies the unit price for that line.
  • VAT rate is selected per line item.
  • The summary groups tax from all lines.
  • Currency and rounding should match your supporting records.

Descriptions, evidence and rounding

A line such as “goods” gives neither the customer nor your future self enough context. Name the item, unit or service period and add a line note for an order reference where useful. Keep the evidence that supports both the amount and VAT treatment outside the invoice.

Percentage calculations can create fractions of a penny. Review the line-level and total figures in the generated PDF, especially on high quantities or many mixed lines. If your accounting records use a prescribed rounding method, make sure the invoice agrees with them.

Calculation is not VAT advice

Simple Invoicing does not determine whether a supply is standard-rated, reduced-rated, zero-rated, exempt, outside the scope or subject to a special rule. It calculates from the user-selected rate and price mode. An incorrect selection remains incorrect even if the arithmetic is exact.

It also does not file a VAT return or send invoice data to HMRC. HMRC plans mandatory e-invoicing for all VAT invoices from April 2029; a PDF generated here is not a structured e-invoice. Follow the implementation roadmap and use suitable software when that format is required.

Related guides and tools

Sole trader invoice checklist UK invoice numbering Create a new invoice

Frequently asked questions

Yes. With VAT enabled, select the verified rate separately on every invoice item and the totals are calculated from all lines.

Use the mode that matches your source prices. Net entry adds VAT; VAT-inclusive entry extracts the net and tax from the gross figure.

No. You choose the rate based on the supply and current rules. The app handles the calculation after that choice.

No. The PDF is one business document. Keep the records required for your return and reconcile the figures in your accounting process.

Keep mixed-rate calculations attached to the items

Enter quantities, prices and verified rates, then inspect the net, VAT and gross breakdown in the PDF.

Create a VAT invoice