Pimbrook Software

8604: Sage 50 – VAT Settings (UK)

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Author: Pimbrook Support

VAT settings (UK)

 

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.

  • Settings > Company Preferences > VAT.

If you are based in the Republic of Ireland, please see VAT settings (ROI)

VAT Details
VAT RegIf 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 CodeBy 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 AmendableTo change the VAT amount that calculates automatically when you create invoices or credit notes, select this check box.
VAT SchemeFrom 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 RateThis 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 NumberYour 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 submissionsSage 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 ThresholdFrom 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 IdentifierEnter the three digit number, representing the EC sales list branch identifier. This number is provided by HMRC.

The default number is 000.

Branch PostcodeType 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 IDEnter your User ID in this box, defined as your Government Gateway Account Username when you set up your account.
PasswordType your password in this box, defined as your Government Gateway Account password when you set up your account.
Confirm PasswordRetype 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.

ForenamesEnter your first or given names in this box, as defined when you set up your Government Gateway account.
SurnamesEnter your last or family name in this box, as defined when you set up your Government Gateway account.
TelephoneEnter 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

 

 


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