How the VAT Return calculates in Sage Accounting.
Description
If your business is VAT registered, you must submit a VAT Return to Revenue Online Services (ROS) every two months. Accounting automatically calculates the VAT due depending on your VAT scheme and the rates you choose when entering your transactions. If you’d like to know more about how each value on the return is calculated, please see the section for your VAT scheme below.
For more information about how to create a VAT Return, please refer to our help article.
Resolution
If you calculate VAT on an invoice basis, the VAT return calculates from the VAT element of your:
- Invoices and credit notes
- Other payments and receipts made through the Banking option
- Journals posted to the relevant VAT nominal codes
How the VAT return calculates
| T1 | The total VAT on sales – This includes the VAT element of:
- Sales invoices
- Sales credit notes – Credit notes are deducted from the value in this box
- Bank, cash and visa receipts
- Journal debits or credits posted to the VAT on sales nominal code
If you’ve purchased standard or lower-rated services from an EU supplier or from a supplier outside of the EU, the reverse charge VAT is also included in this box. |
| T2 | The total VAT on purchases – This includes the VAT element of:
- Purchase invoices
- Purchase credit notes – Credit notes are deducted 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 is repayable – If the amount in T2 is greater than T1 the difference appears here and can be reclaimed 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 | 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:
- Customer receipts, refunds and any payments on account
- Supplier invoices and credit notes
- Other payments and receipts made through the Banking option
- Journals posted to the relevant VAT nominal codes
CAUTION: If you buy or sell goods and services to a VAT registered EU customer or supplier, or to a customer or supplier outside of the EU, VAT is calculated at the point of invoice, not at the point of payment.
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 are deducted from the value in this box
- Bank, cash and visa receipts
- Journal debits or credits posted to the VAT on sales nominal code
If you’ve purchased standard or lower rated services from an EU supplier or from a supplier outside of the EU, the reverse charge VAT is also included in this box. |
| T2 | The total VAT on purchases – This includes the VAT element of:
- Purchase invoices
- Purchase credit notes – Credit notes are deducted 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 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 is repayable – If the amount in T2 is greater than T1 the difference appears here and can be reclaimed 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. |
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