Automatic VAT coding in Ireland: AI that proposes the right rate

The aim is not to replace judgement but to remove typing: for most small businesses the same suppliers and customers account for most transactions each month.

For a bank line it reads the payee, the description and the amount. For a receipt or bill it reads the supplier, the VAT number, the net, VAT and gross amounts, and the rates printed on the document. From those it proposes an account, such as motor expenses or materials, and a VAT treatment.

Each treatment maps to the VAT3 boxes it affects, so coding a transaction also places it on the return.

• Standard rate, 23%
• Reduced rate, 13.5%
• Second reduced rate, 9%
• Livestock rate, 4.8%
• Zero-rated, 0%
• Exempt
• Reverse charge and postponed accounting, where the business self-accounts for VAT

Some VAT decisions depend on facts the documents do not show: whether a meal was business entertainment, whether a van is used privately, whether a subcontractor’s work falls under Relevant Contracts Tax. HelloBooks proposes; the owner or bookkeeper decides. Confirming many correct suggestions at once is fast, and the uncertain ones stand out for attention.

A supermarket receipt can carry several rates on one page, and a café supplier invoice can mix food at a reduced rate with alcohol at the standard rate. These are the documents to look at closely when you review: record each rate separately rather than one blended figure, so the VAT3 boxes and the year-end rate totals stay right.

Because every confirmed line carries a VAT treatment, the VAT3 for the period is a total, not a project. T1 to T4 are calculated from the codes, and each figure can be opened to show the transactions behind it. At year end the same codes give the rate totals for the Return of Trading Details. You enter both returns in ROS.