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Set up VAT

Created on  | Last modified on 

Summary

How to set up VAT correctly prior to entering any transactions in Accounting Start.

Resolution

Before you enter any transactions, and to make sure your VAT calculates correctly on the VAT return, you must make sure your VAT is set up correctly.

This explains how to:

  • Enter your VAT scheme and VAT registration number
  • Choose how often you submit VAT returns
  • Authorise Sage Accounting to send VAT returns to HMRC
  • Set up defaults to reduce errors
  • Set up VAT for trading abroad

Enter your VAT scheme and registration number

  1. From More, choose Business Settings, then Accounting Dates & VAT.
  2. In the VAT Details section, check or enter the following:
    • VAT scheme. Check you have selected the correct scheme. For Flat rate schemes, enter the Flat rate % supplied by HMRC
    • Submission frequency. Choose how often you submit a VAT Return to HMRC. This depends on how you registered with HMRC
    • VAT number - Your VAT registration number
    • HMRC user ID - optional. You can store this here for your records

Authorise for Making Tax Digital (MTD)

To submit VAT returns to HMRC, you must authorise Sage Accounting. You will need to re-authorise every 18 months.

Before you start

  • Make sure the VAT scheme and VAT registration number are correct
  • Make sure existing VAT returns are up to date and shown as submitted
  • Delete any draft VAT returns

Authenticate with HMRC

To submit VAT returns for Making Tax Digital you must authorise Sage Accounting to submit your VAT returns.

You will need your Government Gateway credentials to sign in to the Gateway as part of this process:

  1. From More, choose Business Settings, then Accounting Dates & VAT.
  2. From the Making Tax Digital section, select Authenticate.
  3. Select I am signed up with HMRC for Making Tax Digital then select Authenticate. This takes you to the Gov.uk website.
  4. Select Continue when prompted, and sign in with your Government Gateway credentials.
  5. If you’re a VAT agent, enter your agent services account ID and password.
  6. When prompted, select Grant authority. You are returned to Sage Accounting. When you see a confirmation message at the bottom of the page, that's it, you're done.

Read about setting up for Making Tax Digital.

Set up VAT defaults in Sage Accounting

To make sure you're using the correct VAT rate, consider setting up default VAT rate for things you use often, like categories.

Set up VAT for trading abroad

Sales to EU customers

This is an optional scheme to help you report and pay all EU VAT through a single return instead of having to register and pay VAT in each country you sell to. Read about EU VAT e-commerce rules.

If you want to use this scheme, choose Use destination VAT for sales to EU consumers