Questions on VAT rate and the use of T codes under the flat rate scheme

Posted By Former_Member over 8 years ago

Hi, I have just setup my Sage Instant Accounts and have a couple of questions. I hope that someone can point me in the right direction! They are both regarding VAT, the first being, we are using the flat rate cash based system and our rate is 14.5%, I understand from HMRC during the first year this is reduced by 1% to 13.5%, is 13.5% the VAT amount I enter in the 'Flat Rate' box under VAT of 'Company Preferences'? The second question is the majority of our purchases are entered as bank payments, do I enter these as T9 rather than the defaulted T1? Thank you in advance for your help. Regards - Rob

Steven Holden over 8 years ago

Hi Rob
Apologies you have not had a reply to this thread. I have asked our knowledge team to take a look at this for you.
Kind regards
Jill

Sage Business Community Team
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Steven Holden over 8 years ago

Hi Rob,

Yes youâ€re correct to enter 13.5% in the Flat Rate % box if this is the percentage youâ€ve agreed with HMRC.

Under the Flat Rate Scheme, the purchase of capital assets costing more than Â£2000 including VAT, where VAT is recovered, should be recorded with a T25 tax code. When such assets are sold, full VAT should be declared and therefore the T25 tax code should be used on the sale as well.

If VAT is not recovered on the purchase then the normal tax codes apply, form example T1 for a standard rated sale.

For full information on how to use the Flat Rate VAT Scheme - Cash Based in Sage Accounts, please refer to Ask Sage article 26097.

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Questions on VAT rate and the use of T codes under the flat rate scheme

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