# Tax Codes

For US companies please see [US Tax Codes](/accounting/tax/sales-tax/us-tax-codes.md). 

For UK companies, Tax Codes represent those codes defined by HMRC for VAT on sales and purchases. The Tax Code is typically applied to Line Items on Transactional Documents such as Sales Invoices or Bills.

Each Tax Code has an associated Tax Rate, which defines the % rate at which VAT will be charged on Transactional Documents. 

Note: For UK systems salesorder.com includes a set of pre-defined Tax Codes and associated rates in line with those issued by HMRC.

### Entering and Editing

#### Create new Tax Codes

To create new Tax Codes, from The Explorer click <mark style="color:orange;">Accounting > Tax > Tax Codes</mark>. This displays the current List of Tax Codes. From the Action Bar click 'Create New' to display a new Tax Code Document.

Once saved the new code, in this case SX at 15%, will appear in the Tax Code drop-down list on Line Items. It will also be available to set as the default Tax Code settings on Customers, Suppliers and Items.


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