Question
How to prevent tax from applying to bonus income?
Answer
If when posting items to the bonus income on a vehicle but when you look at the account posting these have had the VAT added to them the most common cause of this is the Bonus Income account not being set correctly to exclude the tax posted to it, this can be corrected by going to:
Accounts > Sales Ledger > Transaction Accounts
Then search for your sites bonus income account that is used.
Once in the account you want to look under the "Tax" heading, and you want to make sure that the "Exclude Tax" option has been ticked to flag the account to not apply tax on postings made to it.