Tax Codes

Sage Line 50 sets the standard UK and EC VAT Rates automatically for you, so you don't normally need to adjust anything here. However we recommend you read this section to familiarise yourself with the codes that are used and what they represent.

Upon installation, Sage Line 50 sets the code T1 - standard rate (currently at 17.5%) as the default tax code.

If you need to add or change VAT Codes, use the Tax Code Setup window. Tax codes are used to identify the rate of VAT to be applied to a given transaction. You can specify up to 100 VAT rates, each one identified by a code from T0 to T99. You can then select the rates that are to be included in the VAT Return calculations and which relate to EC transactions.

On installation, Sage Line 50 automatically sets up the following VAT Rates for you:

$image\bullet.gif$ T0 zero rated transactions

$image\bullet.gif$ T1 standard rate

$image\bullet.gif$ T2 exempt transactions

$image\bullet.gif$ T4 sales to customers in the EC*

$image\bullet.gif$ T7 zero-rated purchases from suppliers in the EC*

$image\bullet.gif$ T8 standard rated purchases from suppliers in the EC*

$image\bullet.gif$ T9 transactions not involving VAT**

* These are outside of the UK.

In accordance with VAT regulations, EC VAT rate codes are given a 'notional' rate that is linked to a UK VAT Rate. For example, Sage Line 50's T8 rate for standard rated purchases from suppliers in EC is linked to T1, which is the standard rate of VAT in the UK.

** These transactions are not included on the VAT Return. Sage Line 50 also uses T9 as the default tax code for all the routines that are non-vatable, e.g. journal entries and error corrections. If you want to change the function of T9, you will need to set up another tax code that is non-vatable, for Sage Line 50 to use for these routines.

Sage Line 50 sets these rates up for this purpose, but you can change these and all other VAT codes if you want. You can set up your VAT codes to be automatically included in your VAT Return.