Sage Tax Codes and How to Update Manually
Sage 50 is one of the leading and best-in-class business management and accounting software that help small business owners to stay on top of their finances. The robust and flexible accounting platform allows you to easily track expenses, send invoices, manage inventory, receive payments, pay employees, and manage cash flow.
Along with these benefits, Sage 50 has also created some default tax codes that can help you automatically calculate the taxes you pay and the taxes (VAT) you charge. All you have to do is to simply assign a tax code to the employee, customer, vendor, or item to automate tax calculations when you process a transaction.
Knowing your Sage Tax Codes
There are a number of different tax codes in Sage 50, each having a different effect on your tax calculation. Here’s a list of tax codes that can come to your aid when you prepare accounts on Sage 50.
- T0: VAT is not payable on zero-rated transactions. This includes books, children’s clothes and some food items.
- T1: Standard rate transactions – currently 20%.
- T2: Exempted from VAT. For example, insurance and financial services.
- T4: Sale of goods to VAT registered customers in EC.
- T5: Lower-rated VAT transactions – usually 5%.
- T7: Zero rated purchases of goods from suppliers in the EC.
- T8: Standard rated purchases from suppliers in the EC.
- T9: Transactions not involving VAT. For example, wages. This is a default non-vatable tax code and any transaction posted with this tax code will not appear on your VAT return.
- T20: Sale or purchase of reverse charges.
- T22: Sale of services to VAT registered customers in the EC.
- T23: Zero rated purchases of services from suppliers in the EC.
- T24: Standard rated purchases of services from suppliers in the EC.
- T25: Purchase or sale of capital items where the amount is more than £2,000.
- 1100L: Individual personal allowance, effective from April 6, 2016.
- BR: 20% tax with no free pay allowance.
- NI or NT: No tax.
- D0: 40% tax with no free pay allowance.
Update the Sage Tax Codes
When you install a new Sage 50 software or begin a process in the new tax year, you need to update your tax codes for correct and up-to-date tax calculations. This can be done manually by following the below mentioned steps.
- From the home screen of Sage 50, click Setup.
- Go to Settings and click on Company.
- From the dropdown list, select Sales Taxes and then select Tax Codes.
- Go to the description field for a particular tax code (for example, Provincial Sales tax code) and update the description line.
- Hit Enter or click on the Magnify button to open the Tax Code Details screen.
- Set up the status to Taxable.
- Change the Rate to the current applicable tax rates.
- Click OK to exit the Tax Codes Details window.
- Repeat the steps to update each tax code that include a change in tax.
- Click OK to exit the Settings window and save changes.
It’s quite easy to update Sage 50 tax codes manually. However, if you need expert help or are facing issues while updating or using tax codes, give us a call. Expert technicians at Accountingadvice.co can easily update all your tax codes to help you get going.
Accountingadvice.co is one of the leading Sage 50 support providers that strive to make technology simple for you. We accord quick resolution of issues in minimum turnaround time. Our expert and certified technicians are well versed with all Sage 50 related issues and fully equipped to solve all your technical problems. The team assures you first call resolution of all your issues in the minimum wait time. Whether you want to install new Sage 50 software, upgrade the existing one, or fix error messages that crop up on your screen while using Sage 50 software, our technicians can give you expert remote tech support at the comfort of your home or office. Our Sage customer support is available 24X7, 365 days a year so that you can enjoy expert tech support anytime, anywhere. Dial our toll free number 1844-871-6289 and get complete support for Sage accounting software. Call now!
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