How the VAT Return calculates

When using the VAT Cash Accounting scheme, input and output on the VAT Return is calculated on the VAT element of the following:

• Sales receipts and payments.
• Purchase invoices and credit notes.
• Sales payments on account.
• Bank transactions.
• The value of any journal entries posted to the Sales or Purchase Tax Control Accounts using a tax code that's flagged to be included in the VAT Return.

NOTE: If you sell goods and services to a VAT registered customer or a customer outside the EU, VAT is calculated at the point of invoice, not when you receive the payment.

Tax codes

VAT is calculated in Sage 50 Accounts using tax codes. Each tax code has its own rate and VAT is calculated based on this rate. For example, to apply the standard rate of 23% when you enter a transaction, choose T1.

When you post a sales receipt or purchase payment, the tax code from the original invoice is used.

Find out more about tax codes >

Prepare your VAT Return

1. Click VAT, then click VAT Return.
2. To create a backup of your data before you reconcile, click Back up and follow the on-screen instructions.
3. Enter the date range for your VAT period.
4. If you want to include transactions within the specified period that you've already reconciled, select the Include reconciled transactions check box.
5. To change the verification checks that run when calculating the VAT Return, click VAT Verification, then click Settings. More information about tax codes >
6. Click Calculate VAT Return.
7. If there are any transactions dated before the date range that aren't reconciled yet, the Earlier unreconciled transactions window appears.
   
   To include these transactions, click Include. If you don't want to include these transactions, click Ignore.

Reconcile the VAT Return

It's important to check your VAT values are correct before you submit them to Revenue. Thankfully it's easy to check in Sage 50 Accounts. To do this follow the steps below.

NOTE: In line with Revenue guidance, all the values on the VAT Return are rounded to the nearest euro.

Verification results

• To view the results of the verification checks, click View results. Find out more about resolving any results that appear >

Make adjustments

1. If you need to adjust any of the values on the return, click Make adjustments.
2. Select the relevant Adjustment box, and enter the description of the change and the value.
3. Click Save then click Close.

Reports - To confirm the VAT Return values are correct

To view a breakdown of the values on your return, once you calculate your VAT Return, click the breakdown button beside the relevant value.

From the VAT Breakdown window, you can then double-click a value to see a list of transactions that are included in that total. You can then use your reports to confirm the values in each of the boxes on the VAT Return.

Click the relevant box below to see which reports you need to run to confirm the values are correct. You can find the reports in Reconciliation reports > Reconciliation reports > Standard VAT.

Reports - Print the VAT reports

1. Click Reports, then click Print VAT Return.
2. In VAT Return Type, select one of the following options:

   VAT Return	To view information from the VAT Return window, select this option.
   Summary	To view a summary of each VAT Return box by tax code and transaction type, select this option.
   Detailed	To view a detailed report of the individual transactions that make up the total for each box on the VAT Return, select this option.
   Adjustments	To view a summary of any manual adjustments made to the VAT Return, select this option.
   Earlier unreconciled transactions	To view a list of any transactions dated before the VAT Return period which you haven't previously reconciled, select this option.

3. Select the required output > Run > Complete the Print, Save As or email window as required.

To flag transactions as reconciled

Once you confirm that all the values on your VAT Return are correct, you must mark the included transactions as reconciled so they don't appear on any future returns.

• Click Reconcile VAT Return, then click Yes.

NOTE: Once you mark transactions as reconciled, you can't reverse this action. The only way to undo the process is to restore a backup.

Complete the VAT Return

If you want to complete these steps later, you can close the VAT Return. To return to this window > VAT > double-click the required VAT Return.

The reconciled VAT Return

The reconciled VAT Return appears on the left. As you've already reconciled this, you can't change the values but you can see the information in more detail if you need to.

To see a breakdown of the values by tax code, click the breakdown button beside the relevant value. To view a list of the individual transactions, double-click a value within the VAT Breakdown window.

You can also print the VAT Return and view the verification results and any manual VAT adjustments you've made.

Transfer the VAT Return values to your nominal accounts

1. Click VAT Transfer and enter the required date for the journal.
2. If required, amend the sales tax amount and the purchase tax amount.
3. Click Post Journal

You've successfully transferred the values to your nominal accounts. If you owe money to the Revenue, it appears as a liability. If you can reclaim the VAT, it appears as an asset.

Generate the VAT Return file for upload to ROS

1. To locate the XML file on your computer click Submit to the Revenue Commissioners then browse Open folder.
2. Upload the XML file to ROS. If you need assistance with doing this, please contact Revenue:
   
   
   • By phone - 1890 201 106, if you're calling from outside Ireland, dial +353 1 702 3021.
   • By email - [email protected]
     
     
3. Once you've submitted the file, select the Mark as submitted check box.

Record payment or Record receipt

You can use this section to record the payment to or receipt from the Revenue. This clears the value of the VAT journal transfer on the VAT liability nominal code.

1. Complete the following information:

   Bank	Select the bank account you want to pay the Revenue from or receive a refund to.
   Date	Enter the date of the payment or refund.
   Reference	Enter the required reference for the payment or refund.
   Details	Enter the required details for the payment or refund.
   Amount	Enter the amount you're paying or receiving.

2. If you use e-Banking click Pay via e-Banking.
3. To post the payment or receipt, click either Post Bank Payment or Post Bank Receipt.
4. If you've already posted the payment or receipt, select either the Mark as paid or Mark as received check box then click Close.

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