Set up VAT

Solution Properties

Solution ID:

222001000100562

Last Modified Date:

Wed Jan 17 15:29:40 UTC 2024

Taxonomy Path:

Case category//How do I...//governmental/legislative compliance

Author:

[email protected]

Set up VAT

Description

This explains how to:

Enter your VAT scheme and VAT registration number
Choose how often you submit VAT returns
Authorise Sage Accounting to send VAT returns to HMRC
Set up defaults to reduce errors
Set up VAT for trading abroad

Cause

Resolution

Before you enter any transactions, and to ensure your VAT calculates correctly on the VAT return, you must make sure your VAT is set up correctly.

Enter your VAT scheme and registration number

From More, select Business Settings, then Accounting Dates & VAT.
In the VAT Details section, check or enter the following:
- VAT scheme - Check you've selected the correct scheme. For Flat rate schemes, enter the Flat rate % supplied by HMRC
- Submission frequency - Choose how often you submit a VAT Return to HMRC
- VAT number - Your VAT registration number
- HMRC user ID - Optional - You can store this here for your records

NOTE: Once connected to Making Tax Digital, HMRC will dictate how often they expect to receive a VAT return. You'll need to contact HMRC to get this changed.

Authorise for Making Tax Digital (MTD)

To submit VAT returns to HMRC, you must authorise Accounting Start. You will need to re-authorise every 18 months.

Before you start

Make sure the VAT scheme and VAT registration number are correct
Make sure existing VAT returns are up to date and shown as submitted
Delete any draft VAT returns

Authenticate with HMRC

To submit VAT returns for Making Tax Digital you must authorise Accounting Start to submit your VAT returns.

You will need your Government Gateway credentials to sign in to the Gateway as part of this process:

From More, select Business Settings, then Accounting Dates & VAT.
From the Making Tax Digital section, select Authenticate.
Select I am signed up with HMRC for Making Tax Digital then select Authenticate. This takes you to the Gov.uk website.
Select Continue when prompted, and sign in with your Government Gateway credentials.
If you’re a VAT agent, enter your agent services account ID and password.
When prompted, select Grant authority. You get returned to Sage Accounting. When you see a confirmation message at the bottom of the page, that's it, you're done.

Read about setting up for Making Tax Digital.

Set up VAT defaults in Sage Accounting

To make sure you're using the correct VAT rate, consider setting up default VAT rate for things you use often, like categories.

Categories >

Set a default VAT rate on categories.

When you enter transactions and select this category, we use the VAT rate you set here. You can still change this if needed.

From More, then Business Settings, then Chart of Accounts.
Open the category from the list.
From the drop-down list, choose the correct VAT rate.

Set up VAT for trading abroad

Sales to EU customers

This is an optional scheme to help you report and pay all EU VAT through a single return instead of having to register and pay VAT in each country you sell to. Read more about EU VAT e-commerce rules.

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