Vat

lgarside

Really simple question - but does it matter if you post expenses as Zero rated when they are Exempt and vice versa. The overall effect is the same - there will be no input tax too claim but does it matter which one you select?

Yestin

Im sure on sage it makes a difference as they will appear in different boxes on the VAT return?? I might be talking a whole loads of rubbish though

Yestin

Actually I have just checked my last turn and T9 (exempt) does not have it's own box after all so I think you are right???

A-Vic

lgarside wrote: »

Really simple question - but does it matter if you post expenses as Zero rated when they are Exempt and vice versa. The overall effect is the same - there will be no input tax too claim but does it matter which one you select?

If i was you i would stick to t0 on the vat return because when you run the year end it reverts back and if you dont change it your vat will be messed up

T1 - VAT
T0 - No vat but included on the vat return
T9 - Zero and not included on the vat return

payrollpro

Technically speaking it is an offence to refer to something as Z when it is in fact E or O (out of scope) and vice versa even though the net effect is the same, no VAT. Sounds daft but up till a couple of years ago customs were very pedantic about it and penalised consistently. My last employers, a local authority had all types of VAT and we constantly had a problem with it.

As far as I am aware they dont come down so hard these days, but my advice would be to try and display the VAT in an accurate manner, it's not worth the agro not to. Go to http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm for a more detailed description of the rates and classifications. You will see that because they refer to very distinct types of purchase and sale there is some logic to making sure your accounts and your clients accounts are structured to reflect the facts.

Payrollpro