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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 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.