T1-standard rate at 20% eg. purchase, parking (with receipt), hotel
T2-exempt eg. postage
T5-reduced rate at 5%
T9-outside scope for VAT (such items do not appear on VAT return) eg. wages, payroll, bank charges and interest, insurance
Cany anyone confirm whether the above is correct.
Also, the previous sage user has been using T2 as the standard rated code (what I would use T1 for)! If I was to change this default code to T1 via settings/configuration/tax codes would I mess up anything and would I have to go into individual nominal codes and adjust it there too?
T1 - standard rate T2 - exempt (eg postage, public transport, bank charges, insurance) T5 - reduced rate T9 - out of scope (payroll, toll charges)
Have a look at the following links for more info): http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm#5 http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm
Thanks for the links, really useful. Am I right then in thinking that bank charges, postage etc should show on bottom half of VAT return with them being T2?
Sage includes T2 (exempt) transactions in boxes 6 & 7
HMRC VAT notice 700/12, para 3.7 is here: http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000070&propertyType=document#P138_13882
