Being 'Taxed at Source'.... How do I generate an invoice which will show that tax being deducted by a limited company before Its paid?

Good day, sjcoxphotography!

Let me show you how to set up this tax in QuickBooks Online.

You can manually track this tax in QuickBooks Online. First, make sure to set up an expense account by following these steps:

1. Go to the Accounting menu and select Chart of Accounts.
2. Select New. From the Account Type drop-down, select Other Expense.
3. From the Detail Type drop-down, select Other Miscellaneous Expense.
4. Enter a Name, then Save.

The next step is to set up a tax expense item.

1. Select Products and Services from the Sales menu.
2. Click New, then choose Service.
3. Enter an item name. From the Income account drop-down, select the tax expense account that you’ve just created.
4. Tap Save and close.

Once done, you'll need to create a credit note that you'll use to offset the deducted tax amount.

1. Go to the + New button and select Credit Note.
2. Under the Product/Service column, select the tax item.
3. Add the tax amount and other important info including your customer’s name, and then Save and close.

Here's how to apply it to the invoice:

1. Choose Receive Payment from the + New button.
2. Select the customer’s name. Under the Outstanding Transactions section, select your customer’s invoice.
3. Under the Credits section, find and select the credit note you created.
4. Click Save and close.

I also added these links if you need help in setting up your VAT in QuickBooks Online:

• Set up and edit VAT settings, codes and rates
• QuickBooks VAT codes

Post again here if you need more help with taxes. We're here to help!