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UK - Default tax codes

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Summary

The default tax codes used in Sage 50 Accounts v27.0 and below.

Description

If you're VAT registered, the tax code for each transaction in Sage 50 Accounts determines the VAT Return box affected.

Your software version

This article relates to Sage 50 Accounts v27.0 and below. For other versions, see our Sage 50 Accounts v27.1 and above article.

Using the right tax code ensures your VAT Return is correct.

Find the right tax code to use

We have some articles to help you find the correct tax code to use:

Default tax codes in your software

To check the default tax codes in your software:

  1. Click Settings then click Configuration then click Tax Codes.
  2. Select the Code then click Edit.

 TIP: If this article doesn't list the tax code, you can create or amend a tax code.

Select the tax code for more information:

▼ T0 - Zero rated transactions
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

Edit Tax Code window in Sage 50 Accounts...

▼ T1 - Standard rated transactions - Currently 20%
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

Edit Tax Code window in Sage 50 Accounts.

▼ T2 - Exempt transactions
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

Edit Tax Code window in Sage 50 Accounts.

▼ T4 - Sale of goods to VAT registered customers in the European Commission (EC)
On the VAT Return
  • Sales - Net amount affects boxes 6 and 8. VAT amount N/A
Configuration

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▼ T5 - Lower Rate - Currently 5%
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

Edit Tax Code window in Sage 50 Accounts.

▼ T7 - Zero rated purchases of goods from suppliers in the EC
On the VAT Return
  • Purchases - Net amount affects boxes 7 and 9. VAT amount N/A
Configuration

Edit Tax Code window in Sage 50 Accounts.

▼ T8 - Standard rated purchases of goods from suppliers in the EC
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
Configuration

Edit Tax Code window in Sage 50 Accounts.

▼ T9 - Transactions not including VAT
On the VAT Return
  • Non vatable code that does not appear
Configuration

Edit Tax Code window in Sage 50 Accounts.

▼ T10 - T18

By default, the software doesn't use these tax codes, so the VAT Return doesn't pick them up.

If you've switched VAT schemes from Standard to a cash-based VAT scheme, you might use codes instead of T0 - T8.

▼ T20 - EU 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
Configuration

Edit Tax Code window in Sage 50 Accounts.

▼ T21 - CIS reverse charge - Standard rate
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

Edit Tax Code window in Sage 50 Accounts.

▼ T22 - Sales of services to VAT registered customers in the EC
On the VAT Return
  • Sales - Net amount affects box 6. VAT amount N/A
Configuration

Edit Tax Code window in Sage 50 Accounts.

▼ T23 - Zero rated or exempt purchases of services from suppliers in the EC
On the VAT Return
  • Purchases - Net amount affects boxes 6 and 7. VAT N/A
Configuration

Edit Tax Code window in Sage 50 Accounts.

▼ T24 - Standard rated purchases of services from suppliers in the EC
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
Configuration

Edit Tax Code window in Sage 50 Accounts.

▼ T25 - UK Flat Rate scheme only - Purchase or sale of capital items, where the purchase amount is more than £2,000 inclusive of VAT
On the VAT Return
  • Purchases - Net amount affects box 7. VAT amount affects box 4
Configuration

Edit Tax Code window in Sage 50 Accounts.

▼ T26 - CIS reverse charge - Reduced rate
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

Edit Tax Code window in Sage 50 Accounts.

This article provides general rather than specific guidance to assist all of our customers. We always do our best to make sure that the information is correct but as it's general guidance, no guarantees can be made concerning its suitability for your particular needs. The information is valid at the time of publishing and is provided without any warranty of any kind, express or implied. You should take professional advice if you require specific guidance on your individual circumstances, for example to ensure that the results obtained from using our software comply with statutory or regulatory requirements. For VAT, customs and excise and duties enquiries you should call the HM Revenue and Customs (HMRC) National Advice Service Helpline on 0300 200 3700, contact your local HMRC office or visit their website at www.hmrc.gov.uk In no event will we be liable to you for any direct, indirect, consequential or incidental loss or damage arising out of or in connection with your use of the information provided.
The VAT or tax codes used in this article are based on the default or recommended codes set up in the software. These may be different in your software.

 

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