Started a new job and am hoping for some guidance on which Sage tax code to use for certain things.
I've had a look through previous posts on Sage and certain transactions seem to vary from T0, T2 and T9.
My main question is around entertainment. For example, client entertainment (lunches, drinks etc), I know the VAT cannot be claimed on this but I am unsure which tax code to use.
2 examples:
1) £100.00 lunch bill with no VAT mentioned on the receipt - is this T0 or T2?
2) £100.00 lunch bill with VAT on the invoice but obviously this cannot be claimed back, is the gross amount T0 or T2?
I think I understand what goes under T9 (wages, bank charges etc) however, I cannot see to distinguish what is T2 or T0 - any help is greatly appreciated.
Hi, I was always taught that if an expense 'could' be vatable to use a T1 tax code. For the lunch, this could be taxable in both 1 and 2 (if its lunch in a restaurant etc), so I would use a T1 tax code with a nil amount of VAT. I only use tax code T0 for zero-rated supplies, so a cold takeaway sandwich, newspaper etc. T2 is for exempt transactions, so insurance, postage etc.
