VAT looks wrong on a trade order — the usual explanations

Short answer: most "wrong VAT" is a display-mode misunderstanding — the cart is showing ex-VAT and the customer is reading inc-VAT, or vice versa.

Ex vs inc mode

Trade counters usually quote ex-VAT; retail customers expect inc-VAT. Good order tools let you switch, and can treat the delivery charge separately from the goods. Check which mode you are in before assuming a calculation error.

Per-line VAT rates

Not everything is 20%. Zero-rated and reduced-rate items exist in plenty of catalogues, and an order mixing rates will not reconcile against a flat 20% mental check. Verify the rate on the item in Linnworks.

Delivery charges

VAT on delivery generally follows the goods. Mixed-rate orders make this genuinely fiddly — if delivery VAT matters at volume, get your accountant's ruling and apply it consistently.

Rounding

Pennies of difference usually come from line-level versus order-level rounding. It is not an error, just a convention — but be consistent so invoices reconcile.

If you are approaching the registration threshold, read how tier pricing interacts with VAT-inclusive quoting and check the threshold rules before your turnover forces the question.

Questions, or want a tool we don't have yet? Email hello@grafto.co.uk — a real person replies.