Some goods and services are taxable for VAT but the vat rate is 0.00%. This rate may only apply in specific situations or it may depend on who the customer is. Some examples include:

• Children's clothes and footwear
• Water
• Basic foods
• Books and newspapers

On the VAT Return

• Sale - Net amount affects box 6. VAT amount N/A.
• Purchase - Net amount affects box 7. VAT amount N/A.

Configuration

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If you're VAT registered, you must charge VAT at the standard rate on goods and services unless they fall under a different category. Before selecting any rate other than standard, check HMRC's website to determine which rate applies to specific circumstances.

On the VAT Return

• Sale - Net amount affects box 6. VAT amount affects box 1.
• Purchase - Net amount affects box 7 VAT amount affects box 4.

Configuration

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Some goods and services are exempt from VAT. For example:

• Insurance, finance and credit
• Education and training
• Fundraising events by charities
• Subscriptions to membership organisations

On the VAT Return

• Sale - Net amount affects box 6. VAT amount N/A
• Purchase - Net amount affects box 7. VAT amount N/A

Configuration

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On the VAT Return

• Sales - Net amount affects boxes 6 and 8. VAT amount N/A.

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This reduced rate of VAT applies to certain goods and services including:

• Children's car seats
• Home energy
• Insulation

On the VAT Return

• Sales - Net amount affects box 6. VAT amount affects box 1
• Purchases - Net amount affects box 7. VAT amount affects box 4

Configuration

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On the VAT Return

• Purchases - Net amount affects boxes 7 and 9. VAT amount N/A.

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On the VAT Return

• Purchases - Net amount affects boxes 7 and 9. VAT amount affects boxes 2 and 4. This is notional VAT which cancels itself out.

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On the VAT Return

• Non-vatable code that doesn't appear

Configuration

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The system excludes these tax codes by default, so they don't appear in your VAT Return.

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NOTE: Introduced in Sage 50 Account sv27.2

On the VAT Return

• Purchases - Net amount affects box 7. 

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On the VAT Return

• Purchases - Net amount affects box 6 and 7. VAT amount affects boxes 1 and 4. This is notional VAT which cancels itself out.

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On the VAT Return

• Purchases - Net amount affects box 7.

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On the VAT Return

• Purchases - Net amount affects box 7. VAT amount affects boxes 1 and 4. This is notional VAT which cancels itself out.

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On the VAT Return

• Purchases - Net amount affects box 7. VAT amount affects boxes 1 and 4. This is notional VAT which cancels itself out.

To ensure your VAT Return is correct when you post a Postponed VAT transaction, the system makes Automatic postings of postponed accounting.

Configuration

For more information, read our What is postponed accounting? guide.

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On the VAT Return

• Purchases - Net amount affects box 7. VAT amount affects box 4.

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This refers to goods and services which fall under the VAT domestic reverse charge.

On the VAT Return

• Sales - Net amount affects box 6. VAT amount N/A
• Purchases - Net amount affects box 7. VAT amount affects boxes 1 and 4. This is notional VAT which cancels itself out

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This refers to the domestic reverse charge on supplies of building and construction services.

On the VAT Return

• Sales - Net amount affects box 6. VAT amount N/A
• Purchases - Net amount affects box 7. VAT amount affects boxes 1 and 4. This is notional VAT which cancels itself out

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On the VAT Return

• Sales - Net amount affects box 6. VAT amount N/A.

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On the VAT Return

• Purchases - Net amount affects boxes 6 and 7. VAT N/A.

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On the VAT Return

• Purchases - Net amount affects boxes 6 and 7. VAT amount affects boxes 1 and 4. This is notional VAT which cancels itself out.

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On the VAT Return

• Purchases - Net amount affects box 7. VAT amount affects box 4.

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On the VAT Return

• Sales - Net amount affects box 6. VAT amount N/A
• Purchases - Net amount affects box 7. VAT amount affects boxes 1 and 4. This is notional VAT which cancels itself out

Configuration