Summary
Description
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
Resolution
Enter your VAT scheme and registration number
- From Settings, choose Business Settings, then Accounting Dates & VAT.
- 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
- From Settings, choose Business Settings, then Accounting Dates & VAT.
- From the Making Tax Digital section, select Authenticate.
- Select I am signed up with HMRC for Making Tax Digital then select Authenticate. This takes you to the Gov.uk website.
- Select Continue when prompted, and sign in with your Government Gateway credentials.
If you’re a VAT agent, enter your agent services account ID and password. - 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.
Set up VAT defaults in Sage Accounting
To make sure you're using the correct VAT rate, consider setting up the default VAT rate for things you use often, like products and services or ledger accounts.
Products and Services
Ledger Accounts
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
Postponed accounting
If you import goods from outside the UK, you can use Postponed Accounting.
With postponed accounting, you can declare and recover import VAT in the same VAT return. This is instead of paying import VAT on or soon after goods arrive and claiming it on your next VAT return.
The VAT is recorded as both a sale and purchase on your VAT return, effectively cancelling each other out.
If you want to use postponed accounting for all your imports, you choose to set this by default, choose Use postponed accounting to deal with import VAT