Processing the workaround in Sage 50 for Versions 27.0 and below

Processing the workaround in Sage 50 for Versions 27.0 and below

Sales Transactions

Sales invoices can be continued to be processed in the same manor as before selling goods to the UK will now be treated as a non EC country and will use the tax code T14.

Selling goods to Northern Ireland will continue to be treated as a EU Sale and will use the code T4 for goods and T22 for Services

 

1st January 2021

  • Complete 2020 Intrastat and VIES
  • Country Codes
    • Remove the UK from the EU in Settings
    • Enter NI and GB before VAT codes for northern Ireland customers and suppliers
    • If you are trading under the northern Ireland protocol you need to do this in company details.

 

Create Tax Codes

Use the next available 12 tax codes in sequence. Create them the same as the existing tax code in the Replica column.

 

Set up Accounts for Contra postings

  • Contra Customer – CONC01
  • Contra Supplier – CONS01
  • Contra Bank – 1210

Versions prior to 27.1 will not create an automatic credit for the postponed accounting VAT.  To facilitate in doing this manually we need to create a new Contra account for Customer, Supplier and Bank.

These accounts can be used for recording of postponed VAT for all UK and rest of word suppliers.  These accounts should always have a 0 balance after transactions are posted and allocated.

Additional Setup

  • EORI number
  • Commodity codes
  • Amend Records for UK Customers, UK Suppliers and products that have Default Tax Codes
  •  Customers and Suppliers in the UK to have a default tax code for postponed accounting to T40
  • Incomplete orders and invoices/credits – change tax codes to include.

Processing in Sage 50 V27.0 and below

Net + VAT – Goods and import VAT

Step 1: Post separate purchase invoices for the NET and VAT, as follows:

 

Type Net T/C VAT
PI – Purchase invoice

(CONS01)

Zero T39 – T50 Import VAT amount
SI – Sales invoice (CONC01) Zero T39 – T50 Import VAT amount
PI – Purchase invoice

(UK SUPPLIER)

Goods net amount T39 – T50 Zero

 

Step 2:  Post a payment (PP) and a receipt (SR) for the VAT component to the Contra Bank Account (1210) as below:

Type Net T/C VAT
Zero T9 – Standard rate Import VAT amount
PP – allocate to purchase invoices (CONS01)
Zero T9 – Standard rate Import VAT amount
SR – allocate to sales invoice (CONC01)

 

Enter in Purchase Invoice

Enter the UK/ ROW supplier invoice-net only (remember to remove the VAT)

 

 

Enter in VAT only Purchase Invoice

Enter the Contra VAT amount against CONS01 (contra account you just set up for Suppliers VAT)

 

 

Balance on Suppliers account

As you can see the balance on the supplier account is the net value and the VAT is showing separately in your Contra account CONS01.

 

 

Contra Sales Invoice VAT only amount

Enter you Contra Sales Invoice VAT only amount

 

 

Supplier Payment to The Contra A/C CONS01

 

 

 

Customer Receipt to The Contra A/C CONC01

 

 

 

Accounts show Zero

All accounts show zero after allocations are done.