How the VAT Return calculates

Summary

How the VAT Return calculates in Sage Accounting.

If your business is VAT registered, you must submit a VAT Return to Revenue Online Services (ROS) every two months.

Sage Accounting automatically calculates the VAT amount due depending on your VAT scheme which rate you apply to your transactions.

If you calculate VAT on an invoice basis, the VAT Return calculates from the VAT element of your:

How the VAT Return calculates:

T1	The total VAT on sales – This includes the VAT element of: Sales invoices Sales credit notes – Credit notes deduct from the value in this box Bank, cash and visa receipts Journal debits or credits posted to the VAT on sales nominal code The VAT Return includes reverse charge VAT for standard or lower-rated services purchased from EU or non-EU suppliers.
T2	The total VAT on purchases – This includes the VAT element of: Purchase invoices Purchase credit notes – Credit notes deduct from the value in this box Bank, cash and visa payments Journal debits and credits posted to the VAT on purchases nominal code
T3	The total amount of VAT payable. If the amount in T1 is greater than the amount in T2, the difference appears here and is payable to Revenue.
T4	The total amount of VAT that’s repayable. If the amount in T2 is greater than T1 the difference appears here, and you can reclaim from Revenue.
E1	The total value of the sale of goods to VAT registered EU customers, excluding VAT. The Net value of destination VAT sales for OSS goods.
E2	The total value of purchases of goods from VAT registered EU suppliers, excluding VAT.
ES1	The total value of the sale of services to VAT registered EU customers, excluding VAT.
ES2	The total value of purchases of services from VAT registered EU suppliers, excluding VAT.
PA1	The value of goods imported under postponed accounting.

If you calculate VAT on a cash basis, the VAT Return calculates from the VAT element of your:

The VAT Return calculates tax at invoice, not payment, for goods or services bought or sold to EU or non-EU VAT-registered parties.

How the VAT Return calculates:

T1	The total VAT on sales – This includes the VAT element of: Customer receipts Customer payments on account Customer refunds – Refunds deducts from the value in this box Bank, cash and visa receipts Journal debits or credits posted to the VAT on sales nominal code The VAT Return includes reverse charge VAT for standard or lower-rated services purchased from EU or non-EU suppliers in this box.
T2	The total VAT on purchases – This includes the VAT element of: Purchase invoices Purchase credit notes – Credit notes deduct from the value in this box Bank, cash and visa payments, recorded through Other Payments Journal debits and credits posted to the VAT on purchases nominal code
T3	The total amount of VAT payable. If T1 exceeds T2, the difference appears here as VAT payable to Revenue.
T4	The total amount of VAT repayable. If T2 is greater than T1 the difference appears here and can reclaim from Revenue.
E1	The total value of the sale of goods to VAT registered EU customers, excluding VAT.
E2	The total value of purchases of goods from VAT registered EU suppliers, excluding VAT.
ES1	The total value of the sale of services to VAT registered EU customers, excluding VAT.
ES2	The total value of purchases of services from VAT registered EU suppliers, excluding VAT.