29013: Changing the Standard VAT Rate In Sage 50

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Last Modified:
Author: Tom Shields

Sage 50 allows you to edit your VAT Rates under Settings>Configuration>Tax Codes. Here you can nominate a new code to be the new Standard Rate.

You will also need to create two further new Tax Codes to represent the existing Tax Codes T8 and T24 which are currently linked to Tax Code T1. You may also need to set up two further Tax Codes to represent T11 and T18.

We recommend using the following codes:

  • T39        replaces T1
  • T40        replaces T8
  • T41        replaces T24
  • T42        replaces T11
  • T43        replaces T18

If these are not available use the next available codes.

 

Changing VAT Rates in Sage 50

The steps involved to change VAT rates in Sage 50 are as follows:

1. Settings>Configuration>Tax Codes

2. Select Code T39 or the next available

3. Click Edit and amend

Percentage 21%
Include in VAT Return
Resale ticked
Outside EC Unticked
Rate Standard.
Change description to Temp. std rated sales and purchase of goods for resale
Click OK

4. Repeat for T40 or next available

Percentage 0%
Include in VAT Return
Resale ticked
Outside EC Unticked
Enable EC Code EC Purchases, Goods
Link to T39 (or alternative)
Rate Standard
Change description to Temp. std rated purchase of goods from suppliers in EC
Click OK

5. Repeat for T41 or next available

Percentage 0%
Include in VAT Return
Resale unticked
EEC Unticked
Enable EC Code EC Purchases, Services
Link to T39
Rate Standard
Change description to Temp. sd. Rated purchases of services from suppliers in EC
Click OK

6. Repeat for T42 or next available

Percentage 21
Include in VAT Return
Resale Unticked
Outside EC Unticked
Enable EC Code Unticked
Rate Standard
Change description to Temp. sd. Rated purchases of goods for non-resale
Click OK

7. Repeat for T43 or next available

Percentage 0%
Include in VAT Return
Resale Unticked
Outside EC Unticked
Enable EC Code EC Purchases, Goods
Linked to T42 (or alternative)
Rate Standard
Change description to Temp. sd. Rated purchases of goods for Suppliers in EC
Click OK

8. Click OK then Apply

9. Click Close, then if prompted to save changes click NO

 

Areas To Consider When Changing VAT Rates 

 

1. Recurring Entries – Sales, Purchase Orders, Invoices and Credits:
  • Ensure you have processed all entries prior to the VAT rate change.
  • Click the relevant list i.e. Invoices, Sales Order or Purchase Order
  • Click New or New Invoice and Recall and then Load.
  • Change the VAT Code, Click OK
  • Memorise again with a different name
    .
2. Recurring Entries – Batch Invoices and Credits:
  • Ensure you have processed all entries prior to the VAT rate change.
  • Click Batch Invoice & Recall the batch.
  • Change the TAX Code.
  • Memorise again with a different name.

 

3. Recurring Entries Bank Transactions:
  • Ensure you have processed all entries prior to the VAT rate change.
  • Click Bank Payments & Receipt’s & Recall.
  • Change VAT Code and click OK.

 

4. Outstanding Orders & Invoices:

All outstanding invoices and orders may need a VAT code change if not completed before the VAT rate change.

 

5. Customer, Supplier & Product Records:

You have a default VAT code on each master record that may need changing. If you only have a small number you can edit each record, otherwise select a number of records that require changing and use Batch Change. You can use the “Filter” feature on these list screens to filter where the “Default Tax Code” = the tax code you wish to change (i.e. T1). Then select all the filtered records and use the “Batch Change” to change the “Default Tax Code” to the new code required (e.g. T39).

 

6. Special Product Codes (S1 and S3):

If you use the Special Product Codes S1 or S3 you can amend the default tax code for these by going to Settings, Invoice and Order Defaults, Options and change the Default tax codes in the Specials Items section at the bottom and select OK.

 

7. Other Considerations:
  • 3rd Party software importing records into Sage 50 – need to ensure you are in sync with codes..
  • Any bespoke VAT reports may need to be reviewed.
  • EU related codes for notional VAT.
  • Be mindful of unallocated items when you have two different VAT codes on the account.
  • Sage 50 Irish Vat codes –> see Sage 50 Irish VAT Codes

 

Demonstration Video:

See our demonstration video here –>  Sage 50 Vat Change Demonstration

 


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