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VAT in Sage Accounting Start

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How to handle VAT in Accounting Start.


Supported VAT schemes

You usually select your VAT Scheme when you sign up and enter your basic company information. You must check your VAT scheme before you enter any transactions to make sure you include the correct VAT.

We support the following VAT schemes:

Invoice basis

On this scheme:

  • you reclaim VAT when you record an invoice from your supplier

  • you pay VAT when you invoice your customers

Cash basis

On this scheme:

  • you pay VAT when your customer pays you

  • you can't reclaim VAT on your purchases until you have paid for them

This is also called the receipts or moneys received basis. 

You can use this scheme if either:

  • your annual turnover is not more than €2,000,000 or,
  • your supplies are almost exclusively, at least 90% made to customers who are not registered for VAT or, are not entitled to claim a full deduction of VAT

Find out more on the Revenue website (Opens in a new window).

If your company isn't VAT registered, select Not Registered.

Read about how to get set up for VAT.

How we record VAT in your ledger accounts

This explains how we record VAT in your ledger accounts so you can understand how this shows on your financial reports and find out how much you need to pay the Revenue.

How the VAT element of transactions records in the ledger accounts varies depending on the VAT Scheme that you have used. Here we explain the main differences between Standard VAT and Cash Accounting:

VAT rates to use

Depending on what you buy or sell, there are several different VAT rates which might apply.

To keep things simple, we set up and update the VAT rates for you. Simply choose the appropriate VAT rate for your transaction. The VAT rates you can choose are:

  • Standard – 23%
  • Reduced Rate – 13.5%
  • Second Reduced Rate – 9%
  • Zero Rated – 0%
  • Exempt – transactions are exempt from VAT. The net amount still appears on your VAT Return
  • No VAT – for transactions not involving VAT. These do not appear on your VAT Return

Other VAT rates

You cannot create your own VAT rates (such as the T codes in Sage 50).

Some businesses use a sub-scheme to calculate VAT differently to the Standard 23%. So to record transactions with a different VAT rate:

  • Enter the transaction and select the Standard rate

  • Change the VAT value to the correct amount. 

    This ensures that the transaction shows on your next VAT Return, and the amount of VAT is correct

Read about VAT rates

The VAT Return

Revenue will need regular VAT return submissions. This could be once a month, quarterly or once a year.

We automatically work out VAT when you enter your transactions. The calculations take account of:

  • Your VAT scheme

  • The VAT rate you select

  • The location and VAT number of the customer or supplier the transaction is for

Read about how each value on the VAT return calculates.

Depending on when your VAT return is due, you will need to:

  • Create the VAT return from Sage Accounting

  • Submit it to Revenue

Read about how to create and submit a return to Revenue.

Related Solutions

Set up VAT