The VAT liable resources case

I received a question from one of the TPC newsletter members. Rob thanks for this, hope you can use this post for your question. Rob wanted to know how I would approach this situation:

With the projects I work on some costs are liable to a value added tax charge and others are not.  How do I get Project 2016 to calculate VAT on those charges to which it applies while omitting it from those which do not so that I get an accurate overall cost budget.

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