Sage Tax codes

[bjarni]

Hello, I am new to this site, but hopefully someone can help me.:|
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Is it ok to use tax code T0 for the following:
-road tax
-car repair (the mechanic is not vat registered)
-petrol (im not claiming the vat, only as expense)
-topup phone cads
-parking meter tickets (only claiming as expense)
-travelcards to meetings
-flight ticket for meeting
-clamping fee and cc charge
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on my last vat return I made an error where I entered some expences on T1 instead of T0. There was no VAT due on those but is it a problem?
Do I need to correct it in Sage or leave it as will not change vat due?
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Which tax code do I use when setting up a Customer in USA? he is buying food so no VAT.
Thank you M

 

[Richard231]

T0 is for zero-rated expenses, or those which would have VAt on them if the supply was VAT registered - things like the car repair you talk of.

There are some items which are VAT exempt - they will never have VAT on them, no matter who you buy them from. These include things like stamps, fines, car tax, train tickets, bank charges. You should use T9 code for these items.

T0 items appear on your VAT Return in box 7 (net purchases), whereas T9 items don't appear on the return at all.

The sale of goods to a non-EU country is considered an 'export' and is outside of the scope of UK VAT i.e. he shuold be T9.

 

[Richard231]

Whilst you should try to get it right going forward, it's not the end of the world if you put T0 or T9, or even T1, as long as you claim the correct amount of VAT.

 

[bjarni]

Thank you Richard

Much appreciated advice x

 

[helen5507]

can anyone help. Im a none vat registered but Ltd company. ive been putting vat receipts onto sage including vat, should these be zero VAT and should i change these to T0 or T9 zero rate before i can reconcile?

and does anyone know if vat receipts can be claimed in the next financial year if we were to change to vat registered?

 

[sheelagh]

Helen, no you can't claim back VAT if the business is not VAT registered.
As Richard says, the T code is less important the actual finiancial entries.
If you have recorded VAT in the accounts you will need to reverse the entries out of purchase tax control account. If this has happened over a long period of time your best option will probably be to use journals
DR - the appropriate expense account
CR - purchase tax control account.

 

[helen5507]

im aware i cant claim vat paid if not vat registered, but if i was to go vat registered next year,could i claim the vat on receipts ive already put on the system?

and if i cant claim the vat in the next year, would i need to put the supplier invoices on now as zero vat even if ive paid the vat?

 

[loachey]

T0 is for zero-rated expenses, or those which would have VAt on them if the supply was VAT registered - things like the car repair you talk of.

There are some items which are VAT exempt - they will never have VAT on them, no matter who you buy them from. These include things like stamps, fines, car tax, train tickets, bank charges. You should use T9 code for these items.

T0 items appear on your VAT Return in box 7 (net purchases), whereas T9 items don't appear on the return at all.

The sale of goods to a non-EU country is considered an 'export' and is outside of the scope of UK VAT i.e. he shuold be T9.

T2 is for VAT exempt items like postage, train tickets, bank charges..... T9 is for items outside the scope of VAT ie payments to HMRC, net wages and things that don't need to appear on the VAT return at all.

 

[johndon68]

T2 is for VAT exempt items like postage, train tickets, bank charges..... T9 is for items outside the scope of VAT ie payments to HMRC, net wages and things that don't need to appear on the VAT return at all.

Bank Charges are T9 as they are outside of the scope of VAT.

John

 

[loachey]

Bank Charges are T9 as they are outside of the scope of VAT.

John

Ooops, I meant bank interest. To be honest, until I read a very long forum debate on the sage tax codes I used to use T9 for everthing that wasn't T0 or T1.

 

[weebly_one]

I thought postage was zero rated rather than exempt and have always used T0 for it - am I wrong?

Seems to me as long as you use a sensible code and are consistent they don't mind anyway - I once rang the VAT helpline for advice and was told use whichever one you like (T0 Zero Rated and T2 Exempt) they really weren't bothered!

 

[semsley]

They wouldn't be bothered because both T0 and T2 appear within the purchases on the VAT return. T9 items don't. As far as HMRC are concerned they are only bothered with taxable items and their rates. Therefore, in sage you could just post to T1, T0 and whatever T you happen to choose for the, currently, 5% rate and T9. Provided you don't trade with the EU.