How the VAT Return calculates

When using the VAT Cash Accounting scheme, the input and output on the VAT Return calculates on the VAT element of the following:

• Sales receipts and payments
• Purchase invoices and credit notes
• Sales payments on account
• Bank transactions
• The value of any journal entries posted to the Sales or Purchase Tax Control Accounts. They need to use a tax code that's flagged to appear on the VAT Return

---

Tax codes

VAT calculates in Sage 50 Accounts using tax codes. Each tax code has its own rate and VAT calculates based on this rate. For example, to apply the standard rate of 23% when you enter a transaction, choose T1.

When you post a sales receipt or purchase payment, the software uses the tax code from the original invoice.

---

Prepare your VAT Return

1. Go to VAT, then select VAT Return.
2. To create a backup of your data before you reconcile, press Back up and follow the on-screen instructions.
3. Enter the date range for your VAT period.
4. If you want to include transactions within the specified period that you've already reconciled, select the Include reconciled transactions checkbox.
5. To change the verification checks that run when calculating the VAT Return, press VAT Verification, then Settings. 
6. Press the Calculate VAT Return button.
7. If there are any transactions dated before the date range that you haven't reconciled yet, the 'Earlier unreconciled transactions' window appears.

• To include these transactions, press Include
• If you don't want to include these transactions, press Ignore

---

Reconcile the VAT Return

It's important to check your VAT values are correct before you submit them to Revenue. To do this, follow the steps below.

---

Verification results

1. To view the results of the verification checks, click View results. Find out more about resolving any results that appear.

---

Make adjustments

1. If you need to adjust any of the values on the return, select Make adjustments.
2. Select the relevant Adjustment box, and enter the description of the change and the value.
3. Press Save then Close.

---

Reports - To confirm the VAT Return values are correct

Once you’ve calculated your VAT Return, you can select to see a breakdown of. If you want to see the included transaction, then double-click the value.

You can then use the reports to confirm the figures in each of the boxes on the VAT Return. Select the relevant box below to see which reports to run to confirm the values are correct.

You can find the reports in:

1. On the VAT Return window, press Reconciliation reports and open the Reconciliation reports folder.
2. Select Standard VAT.

---

Reports - Print the VAT reports

1. Go to Reports, then select Print VAT Return.
2. In 'VAT Return Type', select one of the following options:

   VAT Return	To view information from the VAT Return window, select this option.
   Summary	To view a summary of each VAT Return box by tax code and transaction type, select this option.
   Detailed	To view a detailed report of the individual transactions that make up the total for each box on the VAT Return, select this option.
   Adjustments	To view a summary of any manual adjustments made to the VAT Return, select this option.
   Earlier unreconciled transactions	To view a list of any transactions dated before the VAT Return period, which you haven't previously reconciled, select this option.

3. Select the required output then press Run.
4. Complete the 'Print', 'Save As' or 'Email' window as required.

---

To flag transactions as reconciled

Once you confirm that all the values on your VAT Return are correct, mark the included transactions as reconciled. This prevents them appearing on any future returns.

1. Press the Reconcile VAT Return button, then press Yes.

---

Complete the VAT Return

If you want to complete these steps later, you can close the VAT Return.

To return to this window:

1. Go to VAT then double-click the required VAT Return.

The reconciled VAT Return

The reconciled VAT Return appears on the left. As you've already reconciled this, you can't change the values but you can see the information in more detail if you need to.

To see a breakdown of the values by tax code, click the breakdown button beside the relevant value. To view a list of the individual transactions, double-click a value within the VAT Breakdown window.

You can also print the VAT Return and view the verification results and any manual VAT adjustments you've made.

---

Transfer the VAT Return values to your nominal accounts

1. Press VAT Transfer and enter the required date for the journal.
2. If required, amend the sales tax amount and the purchase tax amount.
3. Press Post Journal.

You've successfully transferred the values to your nominal accounts. If you owe money to the Revenue, it appears as a liability. If you can reclaim the VAT, it appears as an asset.

---

Generate the VAT Return file for upload to ROS

1. To locate the XML file on your computer, press Submit to the Revenue Commissioners then browse Open folder.
2. Upload the XML file to ROS. If you need assistance with doing this, contact Revenue:
   
   
   • By phone - 1890 201 106, if you're calling from outside Ireland, dial +353 1 702 3021
   • By email - [email protected]
     
     
3. Once you've submitted the file, select the Mark as submitted checkbox.

---

Record payment or Record receipt

You can use this section to record the payment to or receipt from the Revenue. This clears the value of the VAT journal transfer on the VAT liability nominal code.

1. Complete the following information:

   Bank	Select the bank account you want to pay the Revenue from or receive a refund to.
   Date	Enter the date of the payment or refund.
   Reference	Enter the required reference for the payment or refund.
   Details	Enter the required details for the payment or refund.
   Amount	Enter the amount you're paying or receiving.

2. If you use e-Banking, press Pay via e-Banking.
3. To post the payment or receipt, press either Post Bank Payment or Post Bank Receipt.
4. If you've already posted the payment or receipt, select either the Mark as paid or Mark as received checkbox then press Close.

---