You can use the VAT audit option to check for potential audit queries around VAT, such as incorrect VAT amounts or transactions incorrectly flagged as EC sales or purchases.

Run the VAT audit

1. On the navigation bar click VAT then on the toolbar click VAT audit.
2. On each tab, select the check box for each query you want to run, then click OK.
3. Enter the required date range then click OK.

Sales Analysis tab

Identify Sales Invoices and Receipts where tax code is non vatable or not in use.

To list sales invoices and bank receipts that use a tax code that is not in use, select this check box.

To determine which ones are in use, Sage 50 Accounts checks the Include in VAT Return check box for each tax code. Any of the following transaction types that have a tax code that is not in use, appear in the VAT Audit window:

• Sales Invoice (SI)
• Bank Receipt (BR)
• Cash Receipt (CR)
• Visa Receipt (VR)

Identify Sales Invoices and Receipts where VAT Rate is less than xx % and Tax amount is not equal to zero, and Sales Credits where VAT Rate is more than xx % and Tax amount is not equal to zero

Use this option to identify vatable transactions where the VAT is more than or less than a specified percentage.

EXAMPLE:  You could use this option to identify sales invoices where the calculated VAT amount is less than 20% but not zero. This would identify any reduced rate transactions or transactions with a settlement discount.

Select the check box then enter the required percentage values in the boxes provided.

Sage 50 Accounts calculates the rate of VAT for each of the following transaction types and if the rate is less than that specified, the transactions appear in the VAT Audit window:

• Sales Invoice (SI)
• Bank Receipt (BR)
• Cash Receipt (CR)
• Visa Receipt (VR)

Sage 50 Accounts also calculates the rate of each sales credit (SC) and if the rate is more than that specified, the transactions appear in the VAT Audit window.

Identify Sales Credits where Net Amount equals zero and VAT amount is over xx

To list VAT only sales credits where the VAT amount is more than the amount specified, select this check box and enter the required amount. Sage 50 Accounts lists all sales credits with a zero net amount and a VAT amount over the amount specified.

Identify EC Sales transactions to Customer accounts with no VAT Registration Number

To list EC transactions where the relevant customer does not have a VAT Registration Number, select this check box. Sage 50 Accounts checks the EC Code check box on each tax code to determine which are EC codes. Any customer transactions posted with an EC tax code, where the VAT Registration Number in the Customer Record is blank, appear in the VAT Audit window.

Identify EC Sales transactions to non-EU and UK customers

To list EC transactions posted to non-EC customers, select this check box. Sage 50 Accounts checks the EC Code check box on each tax code to determine which are EC codes. Any customer transactions posted using an EC tax code, where the Country in the Customer Record is not an EU member state, appear in the VAT Audit window.

Purchase Analysis tab

Identify Purchase transactions where VAT amount is over xx

To list the purchase transactions where the VAT amount is more than a specified amount, select this check box then enter the required amount. Sage 50 Accounts checks the VAT amounts on the following transaction types:

• Purchase Invoice (PI)
• Purchase Credit (PC)
• Bank Payment (BP)
• Cash Payment (CP)
• Visa Payment (VP)

Identify Purchase Invoices and Payments where VAT Rate is more than xx % and Purchase Credits where VAT Rate is less than xx % and VAT amount is over xx

Use this option to identify vatable transactions where the VAT rate is more than or less than a specified percentage and more than a specified amount.

EXAMPLE: You could use this to identify purchase invoices where the calculated VAT amount is more than 20% and more than £500.00.

Select the check box then enter the required values in the boxes provided. Sage 50 Accounts calculates the rate of VAT for each of the following transaction types and if the rate and amount are more than those specified, the transactions appear in the VAT Audit window:

• Purchase Invoice (PI)
• Bank Payment (BP)
• Cash Payment (CP)
• Visa Payment (VP)

Sage 50 Accounts also calculates the rate of VAT for each purchase credit (PC). If the rate is less than that specified and the VAT amount is is more than that specified, the transactions appear in the VAT Audit window.

Identify Purchase Credits where VAT amount equals zero and Net Amount is over xx

To list purchase credits with zero VAT and net more than a specified amount, select this check box and enter the required amount.

Identify EC Purchase transactions from non-EU and UK Suppliers

To list EC transactions posted to non-EC suppliers, select this check box. Sage 50 Accounts checks the EC Code check box on each tax code to determine which are EC codes. Any supplier transactions posted using an EC tax code, where the Country in the Supplier Record is not an EU member state, appear in the VAT Audit window.

Transactional Analysis tab

Identify Journal Transactions posted to VAT Accounts

To list journal transactions posted to the VAT nominal codes, select this check box then from the drop-down list, choose the VAT Liability nominal code. Sage 50 Accounts checks the following nominal codes:

• In Settings, Control Accounts, the VAT on Sales nominal code
• In Settings, Control Accounts, the VAT on Purchases nominal code
• The nominal code specified for VAT Liability

Identify Forward Posted Taxable Transactions

To list transactions that were posted to a date in the future, select this check box. Sage 50 Accounts checks the posted date and the transaction date. If the transaction date is after the posted date, the transaction appears in the VAT Audit window.

To check the posted date on a transaction:

1. On the navigation bar click Transactions then click the transaction.
2. Click View then check the Posted on date.

Identify Journal Transactions where Tax Code is not non vatable

To list journal transactions with a vatable tax code, select this check box. Sage 50 Accounts checks the current Non-Vatable Tax Code in Settings, Company Preferences on the VAT tab.

Any journal transactions that don't use this tax code appear in the VAT Audit window.

Sage 50 Accounts has a range of audit tools available to help you check your accounts are correct. Read more >

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