Can any one help. I'd like to find out if there is a list available which gives basic accounting headings together with their VAT coding, i.e Wages = T9, Purchases = T1, etc. Any help would be appreciated as I didn't realise the difference between Non VAT and Exempt; Is this a common mistake?
The codes used on Sage can be confusing. You may find the following useful:
Standard rated (T1 tax code on Sage): Most items are standard rated
Exempt supplies (T2 tax code on Sage): No tax is chargeable on an exempt supply, and input tax cannot be recovered except as allowed under the partial exemption provisions.
Examples: Finance charges, including bank account charges Insurance Postal services Betting, gaming and lotteries Land sales Educational services Health and welfare Trade union and professional bodies Charitable fund raising events Sports and sport competitions Works of art Burial and cremation Subscriptions to trade unions, professional and other interest bodies Supplies of goods where input tax cannot be recovered
Zero rated supplies (T0 tax code on Sage): This is a taxable supply, but the rate of tax is nil.
Examples: Food (raw or unheated) Sewerage services and water Books etc Construction of buildings, etc Protected buildings International services Transport - ferries, trains and air fares Caravans and houseboats Gold Bank notes Drugs, medicines, aids for the handicapped, etc Imports, exports, etc Charities, etc Childrens Clothing and footwear Caravans and houseboats
Outside the scope of VAT (T9 tax code on Sage): These typically crop up when you try to analyse out the transactions listed in your bank statement or cash book. The following items are outside the scope of the VAT regulations, and you should never account for VAT in respect of them.
Examples: Salary payments Cash transfers between bank accounts Capital introduced and drawings of a proprietor or partner Capital introduced and drawings of a director against his or her director's loan account Payment of dividends Payment of any tax liabilities
