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Tax codes to use for popular goods and services - UK only

Created on  | Last modified on 

Summary

Examples of which tax codes to use in Sage 50 Accounts.

Description

If you're VAT registered, it's important that your transactions use the correct tax codes, to ensure your VAT Return is accurate.

 TIP: This isn't a definitive list. For a more comprehensive list, or if you're unsure which tax code to use, visit GOV.UK or contact HMRC. You can create new tax codes to suit your needs.

Sales and purchases outside the UK

For sales / purchases outside the UK, please refer to Which tax code should I use? (UK only).

Zero-rated goods and services, 0% - T0

  • Most foods
  • Children's clothing
  • Books, newspapers
  • Construction of new housing
  • Passenger transport
  • Prescription medicines

Standard rated, 20% - T1

  • Catering services
  • Alcoholic drinks
  • Confectionery
  • Crisps / savoury snacks
  • Hot food
  • Sports drinks
  • Ice cream
  • Soft drinks / mineral water
  • eBay seller fees

Exempt Goods and Services, 0% - T2

  • Some land and building sales
  • Some finance charges
  • Education and some training
  • Health
  • Betting and gaming
  • Burials and cremation
  • Postal services
  • Insurance

Reduced rate, 5% - T5

  • Mobility aids for the elderly
  • Smoking cessation products - nicotine patches and gum
  • Insulation
  • Radiators
  • Electricity - charity, domestic and residential
  • Gas - charity, domestic and residential

Non-vatable Items - T9

  • Wages
  • Bank or cash transfers
  • PAYE and NI contributions
  • Capital
  • Loans, dividends and gifts of money

Reverse charge items - T20

  • Wholesale supplies of telecommunications services
  • Mobile phones in certain circumstances
  • Computer chips in certain circumstances
  • Emissions allowances

If you haven't found what you're looking for, try using our Which tax code should I use? (UK only) or refer to HMRC's guide on VAT rates on different goods and services.

 

This article offers general guidance only. While accurate at the time of publication, it may not suit your specific needs. We make no express or implied warranties. For tailored advice, consult a professional. For VAT, customs, or duties queries, contact HMRC on 0300 200 3700 or visit www.hmrc.gov.uk. We accept no liability for any loss from using this content. VAT or tax codes shown reflect default software settings and may differ in your setup.