TIP: For a quick guide to tax codes for common scenarios for trading between the UK and EU, take a look at our quick guide.
Using postponed accounting, any import VAT due on goods arriving in the UK can be accounted for on a VAT Return rather than having to pay the VAT as soon as the goods arrive at the UK border. In Sage 50cloud Accounts v27.1 and above, the postponed accounting tax code is T18 by default, unless you've configured your own code. For information on how T18 is configured, read the T18 section on our guide on default tax codes and how they affect your VAT return.
If you use Sage 50cloud Accounts v27.0 or below, for help with postponed accounting postings please refer to our tax code guide.
Posting a supplier invoice with postponed VAT
When the T18 tax code, or equivalent, is used for a purchase invoice, it has the following effect:
- The postponed VAT amount is added to the invoice value.
- A VAT only credit note is automatically posted to T18 for the postponed VAT value to reduce the outstanding invoice value.
- The credit note is allocated to the invoice automatically.
- The VAT due for the purchase is added to boxes 1 and 4 of the VAT Return so it is paid and reclaimed on the VAT Return.
- The credit note does not impact the VAT Return it's there to correct the supplier balance.
- The net value of the purchase is added to boxes 7 of the VAT return.
- If the invoice has multiple item lines with VAT values, a credit is automatically posted individually for each line.
NOTE: By default, T18 is the postponed VAT code, but may differ depending on the tax codes you already have.
Posting a supplier credit with postponed VAT
When the T18 tax code, or equivalent, is used for a purchase credit, it has the following effect:
- A VAT only invoice is automatically posted to T18 for the postponed VAT value.
- The invoice is allocated to the credit automatically.
- The VAT value for the credit reduces the value of boxes 1 and 4 of the VAT Return.
- The VAT on the VAT only invoice will not impact the VAT Return, it's purpose is to keep the supplier balance correct.
- The net value of the credit reduces the value of boxes 7 of the VAT Return.
- If the credit has multiple item lines with VAT values, an invoice is automatically posted individually for each line.
NOTE: NOTE: By default, T18 is the postponed VAT code, but may differ depending on the tax codes you already have.
If you make postponed accounting postings based on an estimated VAT amount, once the VAT is confirmed you can post further transactions to correct the VAT amount on your next VAT Return. Read more >
|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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