Sage Accounts – List of default VAT codes and examples are:

T0     Zero rated – Food, Sewage disposal/water, Books, pamphlets and brochures, Newspapers, Maps, Sales outside of EU etc

T1     Standard 20% with effect from 4/1/2011 – all UK Sales

T2     Exempt transactions – 0% Post Office postal costs, Insurance, Bank Charges, Professional memberships, finance charges

T4     Sales to Customers in the EC – where you have received their VAT Code*

T5     Lower Rate – e.g. 5% energy tax

T7     Zero-rated purchases – from suppliers in EC**

T8     Standard-rated purchases – from suppliers in EC**

T9     Transactions NOT involving VAT – Bank Transfers, Salaries, PAYE/etc, Insurance Claims, Loans, Dividends, MOTS, Vehicle Licence duty, Local Authority Rates***

* This tax code can be used for VAT-registered customers outside of the UK but within the EC. You must have the customer’s VAT registration number entered on the customer record if you want to use the T4 tax code. If your customer is not VAT-registered, then you should use one of the standard UK VAT rates.

** These tax codes can be used for suppliers outside of the UK but within the EC. In accordance with VAT regulations, EC VAT rate codes used for purchases are given a ‘notional’ rate that is linked to a UK VAT Rate. For example, Sage 50 Accounts’s T8 rate for suppliers in the EC is linked to T1, which is the standard rate of VAT in the UK.

*** These transactions are not included on the VAT Return. Sage 50 Accounts also uses T9 as the default tax code for all the routines that are non-vatable, e.g. journal entries and error corrections. If you want to change the function of T9, you will need to set up another tax code that is non-vatable, for your program to use for these routines.

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