VAT and line items

A line item is the smallest unit of an invoice. It has a description, a quantity, a unit price and, if you are VAT registered, its own VAT percentage. Nothing else. There is no discount field, no per-invoice tax setting and no category, because those all turn out to be a line item with a different description.

The five columns

The editor in the drawer and the printed document show the same information under slightly different headings, and it is worth knowing both because a client will quote the printed one back at you.

The last column recalculates as you type, so you can see the effect of a rate change before you commit to it. The bin icon at the end of each row deletes that line, except when only one row is left: the editor always keeps one.

Why the rate is per line

Most cleaning work in the UK is standard-rated, so most invoices are twenty per cent all the way down. CleanFlo still puts the rate on the line rather than on the invoice, for the cases where one bill legitimately carries more than one rate.

• A disbursement recharged at cost, such as a parking or congestion charge paid on the client's behalf, which carries no VAT of its own.
• Cleaning carried out in the course of constructing a new dwelling, which can be zero-rated when the conditions are met.
• A line you deliberately want to sit at a different rate because your accountant has told you to.

A new line starts at 20 when you are VAT registered and 0 when you are not, so the common case needs no thought at all. You only ever touch the column when a line is genuinely different.

The arithmetic, in order

Four calculations, done in this order, on every invoice and every quote.

1. Line net = quantity × unit price. Nothing to do with VAT yet.
2. Line VAT = line net × the line's own rate ÷ 100. Zero for everybody who is not VAT registered, whatever is in the rate column.
3. Line amount = line net + line VAT. This is the figure in the Amount column of the printed document.
4. Invoice totals: Subtotal is the sum of the line nets, VAT is the sum of the line VATs, and Total Due is the two added together.

The VAT row never prints the rate beside it. On an invoice with three lines at three rates there is no single rate to print, so the label stays bare and the breakdown lives in the line table where it belongs. Money is rounded to whole pence when the invoice is saved, so a line of three at £19.99 is stored as £59.97 and not as a long binary fraction.

When you are not VAT registered

Plenty of cleaning firms are under the threshold and have no business showing VAT on anything. CleanFlo handles this with one switch, not with a rate of zero: turn VAT registered off under Settings → Company and VAT stops existing across the whole product.

With the switch off, five things change and none of them need any further attention from you.

• The VAT % column vanishes from the line editor on both invoices and quotes.
• The badge reading VAT registered · rates per item is not drawn.
• The VAT column vanishes from the printed document, leaving Description, Qty, Unit Price and Amount.
• The VAT No: line under your company address is not printed, even if a number is stored.
• The VAT row is dropped from the totals block, so Subtotal and Total Due are the same figure.

Hiding the quantity column

One more column is optional, for a different reason. Under Invoicing → Settings, the Display Options card carries a switch called Show quantity column with the sub-line Displays a Qty column in the line items table. Turn it off and Qty disappears from the printed document.

It stays in the editor, and the arithmetic is unchanged: a quantity of four at £130 is still £520 net, it just is not shown as four lots of anything. That suits a firm that prefers to write "Weekly office cleaning, August" against a single figure rather than itemise the visits.

What CleanFlo does not do about VAT

Two practical consequences follow. First, set your VAT number under Settings → Company the day you register, because an invoice without it is not a valid VAT invoice and a client's bookkeeper will send it back. Second, keep the classification of each line consistent: if you decide a recharged parking fee is a disbursement, treat every recharged parking fee the same way, because the pattern is what an inspection looks at.