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Default tax codes and how they affect your VAT Return - Sage 50/50cloud Accounts v27.0 and below - UK

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Summary

. This article provides a list of the tax codes in v27.0 and below, with details on how they are configured and how they affect your VAT return.

Description

If you're VAT registered, the tax code you enter against each transaction in Sage 50cloud Accounts determines which box of your VAT Return is affected.

NOTE:  This article relates to Sage 50 Accounts and Sage 50cloud accounts v27.0 and below, for details of tax codes in Sage 50cloud Accounts v27.1 and above, read more >

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Using the right tax code ensures your VAT Return is correct. Below, we describe the default codes that are set up ready in your software.

TIP: Need more help to find the right tax code?

Default tax codes in your software

To check the default tax codes in your software:

  • Click Settings then click Configuration then click the Tax Codes.

TIP: If required, you can create new tax codes to suit your needs.


The following information relates to the most recent version of Sage 50 Accounts, if you have an earlier version, the settings may be different.

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

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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

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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

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T4 - Sale of goods to VAT registered customers in 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

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T7 - Zero rated purchases of goods from suppliers in EC

On the VAT Return

  • Purchases - Net amount affects boxes 7 and 9. VAT amount N/A.

Configuration

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T8 - Standard rated purchases of goods from suppliers in 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

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T9 - Transactions not including VAT

On the VAT Return

  • Non vatable code that does not appear

Configuration

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T10 - T18

By default, these tax codes are not used and are not picked up on your VAT Return.

However, if you've switched VAT schemes from Standard to a cash-based VAT scheme, you may be using these codes instead of VAT codes 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

 

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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

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T22 - Sales of services to VAT registered customers in EC

On the VAT Return

  • Sales - Net amount affects box 6. VAT amount N/A.

Configuration

 

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T23 - Zero rated or exempt purchases of services from suppliers in EC

On the VAT Return

  • Purchases - Net amount affects boxes 6 and 7. VAT N/A.

Configuration

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T24 - Standard rated purchases of services from suppliers in 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

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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

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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

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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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