Fuel scale charges are taxes against fuel provided for personal use in company cars. These charges are dependent upon the carbon dioxide, CO2 emissions band of the car. Paying a fuel scale charge allows you to recover the VAT on the fuel purchased by your business.
When you enter your fuel scale charge details, a set of journal entries are created and posted to the audit trail.
Tip: If you’re using a UK Flat rate VAT scheme, scales charges aren’t applicable.
To enter scale charges
1. VAT > Scales Charges.
2. Complete the Enter Details window as follows:
Scale charges account
Choose the required nominal code for your scale charges. By default, this is 7350.
Posting date
Enter the date for the scale charges.
Reference
Enter a reference for your scale charges transactions.
Details
Enter any required details.
Gross scale charge
Enter the gross value of the scale charge.
Tax code
Choose the required tax code for the scale charge.
VAT scale charge
This value calculates automatically from the gross scale charge value and the tax code. You can’t change this.
Net scale charge
This value calculates automatically from the gross scale charge value and the tax code. You can’t change this.
To ensure you record your VAT correctly, before you process your transactions in Sage 50 Accounts you should check the details in the VAT Settings are correct.
If your company is VAT registered, you should receive a VAT registration number from your tax authority. This must appear on your financial documents such as invoices and credit notes.
To check your VAT registration number is in the correct format, please refer to HMRC
Non-Vatable Tax Code
By default, T9 is the non-vatable tax code. To change this, from the drop-down list choose the required tax code.
You should use this tax code on transactions, that don’t include VAT and are not included on the VAT Return.
Item VAT Amendable
To change the VAT amount that calculates automatically when you create invoices or credit notes, select this check box.
VAT Scheme
From the drop-down list choose from one of the following VAT schemes:
Standard VAT – Where you account for VAT at the point of sale, regardless of whether or not payment has been made.
VAT Cash Accounting (UK) – Where you account for VAT when money is paid or received for goods or services.
Flat Rate – Invoice Based – Similar to standard VAT where you account for VAT at the point of sale but the VAT calculates using a fixed percentage of your total turnover.
Flat Rate – Cash Based – Similar to VAT cash accounting where the VAT is accounted for when money is actually paid or received for goods or services. In this case the VAT calculates using a fixed percentage of your total turnover.
You can change the VAT scheme your software is using, but before doing so you should read Switching VAT schemes
If you are unsure which VAT scheme to choose, please contact HMRC
Flat Rate
This box only appears if you have selected UK Flat Rate as your VAT scheme.
This is the VAT rate percentage HMRC advise you to use.
The VAT percentage is based on a trade sector. The correct sector is the one that most closely describes what your business will be doing in the coming year.
If you are not sure what this percentage should be, please contact HMRC
Validate VAT Number
Your EC Sales List Submission (ECSL) must include your customers’ country codes and VAT registration numbers.
If you want to validate EU VAT numbers for all EU member countries, Select this check box.
Enable Making Tax Digital for VAT submissions
Sage 50cloud Accounts – If you’ve registered with HMRC for Making Tax Digital (MTD), you must select this check box before you make your first MTD VAT Return submission.
EC Sales
If you are registered for VAT in the UK and supply goods or services to customers in the EC, you need to submit an EC Sales List (ECSL). The information provided on the ECSL is used in the UK and by other Member States to ensure that VAT has been correctly accounted for, on the sale of goods and services within the EC.
If you have more than one company, you must submit an ECSL for each company.
If you want to submit your ECSL to HMRC online, you must complete this section.
Error Threshold
From the drop-down list, choose your error threshold.
This determines whether the error tolerance setting for an ECSL submission is set to thirty or zero per cent.
Zero per cent means that you will accept zero tolerance for submissions, in which case the submission is likely to be rejected wholesale, when the first error is encountered in a submission line.
The default setting, as per HMRC recommendation, is thirty per cent.
Branch Identifier
Enter the three digit number, representing the EC sales list branch identifier. This number is provided by HMRC.
The default number is 000.
Branch Postcode
Type the EC sales list branch postcode you registered with HMRC.
eSubmissions Credentials
The following credentials do not apply to Making Tax Digital VAT Return submissions.
User ID
Enter your User ID in this box, defined as your Government Gateway Account Username when you set up your account.
Password
Type your password in this box, defined as your Government Gateway Account password when you set up your account.
Confirm Password
Retype your password in this box, defined as your Government Gateway Account password when you set up your account.
eSubmissions Contact Details
The following credentials do not apply to Making Tax Digital VAT Return submissions.
Forenames
Enter your first or given names in this box, as defined when you set up your Government Gateway account.
Surnames
Enter your last or family name in this box, as defined when you set up your Government Gateway account.
Telephone
Enter your contact telephone number in this box, as defined when you set up your Government Gateway account.
Email
Enter your contact email address in this box, as defined when you set up your Government Gateway account.
EC VAT Descriptions
If you sell goods to customers in an EC member state, you can use this option to amend the descriptions that appear when you use an EC tax code on an order orinvoice.
This helps the EC customer to account correctly for the notional VAT on their VAT Return.
HMRC Bank Account
If you use Sage e-banking to pay your VAT liability to HM Revenue & Customs (HMRC), you need these details to successfully make an online payment.
Occasionally, HMRC change their bank account details. If you are notified of a change you can update the details by entering the revised sort code and account number.
Verification Settings
When you calculate the VAT Return you can run extra checks on your data by selecting these options. These checks help to ensure your VAT Return is correct before you submit the values to HMRC. Once you calculate the VAT Return you can view the results of these checks and then make amendments as required. Full information about each of these settings can be found in the VAT Verification Settings help
3. Before you can start submitting VAT Returns under MTD you must prepare your data to ensure that the values you submit under MTD are correct. This includes:
Ensuring you’re using the correct VAT settings. SKB 36914.
Note : do not tick Enable Making Tax Digital until you are ready to make your first submission.
4. Register with HMRC for MTD SKB 42782 – must have software and data ready before you sign up as once registered your next return must be via the MTD system.
5. Tick Enable Making Tax Digital when you are ready to make your first submission
6. On the menu bar click Settings, click Company Preferences then click the VAT tab
7. Put tick in box Enable Making Tax Digital for VAT submissions.
As part of their Making Tax Digital (MTD) plans to modernise the tax system, the Government is changing the way VAT registered businesses create and submit VAT Returns.
What does it mean for businesses?
The changes being introduced in April 2019 under Making Tax Digital for VAT are compulsory for businesses that:
• Are VAT registered, and
• Have a taxable turnover above the VAT registration threshold, currently £85,000.
Even if you already submit VAT Returns online from your Sage 50 Accounts, or through the HMRC online services, you will still need to sign up with HMRC and start submitting under MTD.
If your business is affected, we recommend you start preparing soon to ensure a smooth switch to Making Tax Digital for VAT.
Does Making Tax Digital for VAT affect my business?
Where religious beliefs are incompatible with the regulation requirements.
Where it isn’t reasonably practicable to use the required digital tools, for example, remoteness of location.
Businesses subject to an insolvency procedure.
If your business is affected, the new VAT rules apply from 1 April 2019, and you must:
Ensure you have MTD for VAT compliant software.
Start maintaining digital business records for the purposes of VAT.
Sign up with HMRC for MTD for VAT.
Start submitting your VAT Return through your compliant software.
If you think you may be exempt from MTD, you should contact the HMRC VAT Helpline to make alternative arrangements.
What do I need to do?
Don’t worry, if you currently subscribe to Sage 50cloud Accounts and have v24.2 installed, this is MTD ready.
If you’re still using Sage 50 Accounts, it’s quick and simple to switch your contract to Sage 50cloud Accounts, Contact Gavin on 051-395900 for more details.
HMRC will soon be running an open pilot for MTD for VAT. Once you have your MTD compliant software, we recommend you sign up early. This gives you time to make any required changes to your VAT processes and get used to the new system before it’s mandatory.
Is my Sage 50 Accounts compliant with Making Tax Digital?
Making Tax Digital for VAT becomes mandatory in April 2019. A key change is that from April 2019 HMRC will no longer provide online tools for digital submission of VAT Returns. Instead, submissions must be made through commercial software.
If you currently subscribe to Sage 50cloud Accounts and you have v24.2 installed, this is MTD ready.
Check if you have Sage 50cloud Accounts
If you’re not sure which software you currently have, to quickly find out if you’re using Sage 50cloud Accounts, check if you can see the Linked accountant option in bank records.
1. Open Sage 50 Accounts.
2. On the menu bar click File, click Open then click Open Demo Data.
3. In Logon name enter manager then click OK.
4. On the navigation bar click Bank accounts.
5. Double-click the default bank account, 1200 – Bank Current Account.
6. In the Account Details tab, check if you can see a Linked accountant section as shown below.
Is making Tax Digital Switched on ?
To check if you Accounts has MTD switched on (once you are compatible) you can do this by going into Help – About on your software. Under the heading Features Enabled and Making Tax Digital will say Yes or No.
If its No its not switched and you can switch it on as follows:
Click on Settings – Company/Preferences
Click on the VAT Tab
Tick the box Enable Making Tax Digital for VAT submissions
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