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Are you coding your VAT entries correctly?

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When you enter transactions its important to use the right tax code otherwise your VAT returns are likely to either need adjustment or contain errors, but often when entering transactions your software won’t tell you what the codes mean, here is a list of Sage codes:

 

T0 Zero rated transactions
T1 Standard rate
T2 Exempt transactions
T4 Sales of goods to VAT registered customers in EC
T5 Lower rate
T7 Zero-rated purchases of goods from suppliers in EC
T8 Standard-rated purchases of goods from suppliers in EC
T9 Transactions not involving VAT
T20 Sales and purchases of reverse charges
T22 Sales of services to VAT registered customers in EC
T23 Zero-rated purchases of services from suppliers in EC
T24 Standard-rated purchases of services from suppliers in EC
T25 Flat rate accounting scheme, purchase and sale of individual capital items > £2,000

 

There are different rates of VAT, depending on the type of goods or services your business provides. At the moment there are three different rates. They are:

  • standard rate – 20 per cent
  • reduced rate – 5 per cent
  • zero rate – 0 per cent

You can check which rate to use on the HMRC Website http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm

UK supplier who aren’t VAT registered would use T9 in Sage.

steve@bicknells.net

 

 

 

 

 


3 Comments

  1. Reblogged this on Global Thinking Business Systems and commented:
    Good article to help you review your vat codes.

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