How To: Charge a Customer Gross Prices if they don't pay Tax
The Inflate Prices option allows Khaos Control to increase the net selling price of goods for customers who are not charged VAT.
This can be useful when selling to customers in countries or territories where VAT does not apply, as it allows you to maintain the same selling price that a VAT-paying customer would see. As a result, the VAT element is effectively retained within the sales price rather than being deducted from the invoice value.
A common use case is post-Brexit sales to EU customers, where businesses may wish to keep pricing consistent with UK VAT-inclusive retail pricing.
Important: When enabled, this setting applies to all customers assigned to the selected Company Class.
Enable Price Inflation for a Company Class
- Open a System Data screen (show me how).
- Press Alt + E or click Edit to enter edit mode.
- Tick the Inflate Prices checkbox for the required Company Class.Tip: The Inflate Prices option appears towards the right-hand side of the grid. It is good practice to green-select the row first to ensure you are updating the correct Company Class.
- Press Ctrl + S or click Save.
The setting will now apply to all customers assigned to that Company Class.
How It Works
When a customer belongs to a Company Class with Inflate Prices enabled:
- The system increases the net selling price to match what the gross price would have been if VAT had been charged.
- The customer is still billed without VAT where appropriate.
- The overall selling price remains closer to your standard VAT-inclusive pricing model.
Example
A product is normally sold for:
| Description | Amount |
|---|---|
| Net Price | £100.00 |
| VAT (20%) | £20.00 |
| Gross Price | £120.00 |
With Inflate Prices enabled for a VAT-exempt customer:
| Description | Amount |
|---|---|
| Invoice Price | £120.00 |
| VAT Charged | £0.00 |
This helps maintain pricing consistency and can improve gross margin compared with reducing the selling price to the net value.
Additional Information
- The setting applies to all members of the selected Company Class.
- This functionality is commonly used for export and VAT-exempt sales scenarios.
- Customer pricing should always be reviewed to ensure it complies with local regulations and your pricing strategy.
- The Inflate Prices setting is not included in Web Service exports.
Recommended Uses
A common example is:
- Amazon imports for Jersey sales orders.
- VAT-exempt international sales where payment amounts need to match the marketplace or website order value.
Using Inflate Prices can help ensure the invoice total matches the amount paid by the customer, reducing pricing discrepancies and reconciliation issues.