Not professional tax advice. This article covers how data looks and syncs between Buildxact and Xero. If you're unsure which VAT rules apply to your work, seek independent advice from a tax professional.
This article covers three common scenarios for handling reverse VAT (also called reverse charge) between Buildxact and Xero. The same principles apply if you're using QuickBooks in the UK.
Watch the video below to see this in action, or continue reading for step-by-step details.
Tip: From experience, syncing from Xero into Buildxact tends to be simpler, because Xero is more fully set up to handle reverse VAT natively. Scenario 2 below is often the easiest path.
Scenario 1: Enter the bill in Buildxact first, then sync to Xero
This covers entering a received purchase order in Buildxact and syncing it to Xero.
Enter the received purchase order in Buildxact.
Set the VAT to 0%. Reverse VAT focuses on the net amount, so most people remove the VAT before receiving the order. You can leave it at 20% if you prefer — it doesn't affect the sync in any major way given you'll be changing the tax setting on the Xero end.
In the description or name field, add a note such as Reverse VAT. This makes it easy to identify in Xero so you can update it to apply reverse charge treatment there.
Sync the item to Xero.
In Xero, the bill will appear as exempt (because the VAT was set to 0%). You can then update the tax rate to Reverse Charge Expenses (20%) in Xero to handle the reverse charge correctly.
Scenario 2: Enter the bill in Xero first, then sync to Buildxact
This is the recommended approach for most reverse VAT workflows.
In Xero, enter the bill with the reverse VAT tax type applied and a total of the net amount only (e.g. £15,000, 0% VAT). Include a note such as Reverse VAT in the bill name or reference field to make it easy to identify.
Once the bill syncs into Buildxact, it will come in at 0% VAT so the total matches what's in Xero. Simply save and assign the order — no further changes are needed on the Buildxact side. This is why syncing from Xero into Buildxact is generally the simpler direction.
For more on importing bills from Xero into Buildxact, see:
Scenario 3: Send a purchase order from Buildxact, then pull the bill back from Xero
Use this approach when you want to send a purchase order to a supplier or subcontractor from Buildxact, and then import the bill from Xero once it's been entered there.
Step 1: Create and send the purchase order in Buildxact
Create the purchase order in Buildxact.
In the Instructions box, add a note indicating this is a reverse charge item. Set up a template in the instructions field with your standard reverse VAT wording so you don't need to retype it each time.
Set the VAT to 0% so the supplier sees the net amount on the order.
Send the purchase order.
Step 2: Enter the bill in Xero
Enter the bill in Xero with 0% VAT (reverse charge), the same way as in Scenario 2.
Step 3: Import the bill into Buildxact and link to the purchase order
In Buildxact, go to Import bills.
Select Link to existing. This shows a list of purchase orders per job. Only purchase orders with a status of unsent, sent, or part received will appear — fully received orders won't show, as they can't accept further bills.
Select the matching purchase order.
Important: Remove or zero out the original purchase order lines. If you leave them in, the bill will be counted twice.
Link the new line items to the appropriate costing category (and item, if relevant) in your job costings.
Save to complete the process.
For general VAT setup in Buildxact, see:
Need help? Reach out to our support team — we're here to help!