Set up VAT

Summary

Setting up VAT in Sage Accounting.

Description

Before you enter any transactions, and to make sure your VAT calculates correctly on the VAT return, you must make sure your VAT is set up correctly.

This explains how to:

Enter your VAT scheme and VAT registration number
Choose how often you submit VAT returns
Set up defaults to reduce errors
Set up VAT for trading abroad

Resolution

Enter your VAT scheme and registration number

From Settings, choose Business Settings, then Accounting Dates & VAT.
In the VAT Details section, check the following:
- VAT scheme - Check you have selected the correct scheme
- Submission frequency - Choose how often you submit a VAT Return to the Revenue. This depends on how you registered with the Revenue
- VAT number - Your VAT registration number

Set up VAT defaults in Sage Accounting

To make sure you're using the correct VAT rate, consider setting up default VAT rate for things you use often, like products and services or ledger accounts.

Products and Services

Set a default VAT rate on a product or service. For example, if you sell children's clothes, you may want to set the VAT rate to Zero rated.

When you enter transactions using these products or services, we use the VAT rate you set here. You can still change this if needed when entering an invoice or credit note.

From Products, open the product or service from the list
From the drop-down list, choose the correct VAT rate.

Ledger Accounts

Set a default VAT rate on ledger accounts.

When you enter transactions and select this ledger account, we use the VAT rate you set here. You can still change this if needed.

From Settings, then Business Settings, then Chart of Accounts.
Open the ledger account from the list.
From the drop-down list, choose the correct VAT rate.

Set up VAT for trading abroad

Sales to EU customers

This is an optional scheme to help you report and pay all EU VAT through a single return instead of having to register and pay VAT in each country you sell to. Read about EU VAT e-commerce rules

If you want to use this scheme, choose

Use destination VAT for sales to EU consumers

Postponed accounting

If you import goods from outside the EU, you can use Postponed Accounting.

With postponed accounting, you can declare and recover import VAT in the same VAT return. This is instead of paying import VAT on or soon after goods arrive and claiming it on your next VAT return.

The VAT is recorded as both a sale and purchase on your VAT return, effectively cancelling each other out.

If you want to sue postponed accounting for all you imports, you choose to set this be default. Choose

Use postponed accounting to deal with import VAT