I thought it might be useful (or not, we'll see) to have a list of the sort of stuff that gets allocated to the 0% tax codes. So that people understand what expenses should be allocated to what sort of VAT and whether it ends up on your VAT return.
And tbh so I have a reference I can check with if I am unsure about something.
Will HMRC shoot you if you use zero-rated instead of exempt or out of scope instead of exempt? Probably not, but it still might be useful.
It is slightly Sage centric but here are the 3 types of VAT I'm talking about :
T0 Zero rated transactions - These are things such as some foods, water, books, newspapers. They appear on your VAT return but no VAT is paid. I'd also put things in here where the supplier was not VAT registered as you want this to show up in your return.
Transactions outside the EC VAT Zone?
T2 Exempt transactions - These are things such as Post office postal costs, Insurance, Bank charges, Professional memberships, finance charges. They Appear on your VAT return but do not reduce your VAT to pay.
T9 Transactions not involving VAT. - These are transactions outside the scope of VAT. Bank Transfers, Salaries, PAYE/etc, Insurance claims, Loans, Dividends, MOTs vehicle licence duty, Local authority rates. With the recent ruling on FRS I'd also put interest received in here. These do not appear on your VAT return.
I'll try and update it if people give feedback.
And tbh so I have a reference I can check with if I am unsure about something.
Will HMRC shoot you if you use zero-rated instead of exempt or out of scope instead of exempt? Probably not, but it still might be useful.
It is slightly Sage centric but here are the 3 types of VAT I'm talking about :
T0 Zero rated transactions - These are things such as some foods, water, books, newspapers. They appear on your VAT return but no VAT is paid. I'd also put things in here where the supplier was not VAT registered as you want this to show up in your return.
Transactions outside the EC VAT Zone?
T2 Exempt transactions - These are things such as Post office postal costs, Insurance, Bank charges, Professional memberships, finance charges. They Appear on your VAT return but do not reduce your VAT to pay.
T9 Transactions not involving VAT. - These are transactions outside the scope of VAT. Bank Transfers, Salaries, PAYE/etc, Insurance claims, Loans, Dividends, MOTs vehicle licence duty, Local authority rates. With the recent ruling on FRS I'd also put interest received in here. These do not appear on your VAT return.
I'll try and update it if people give feedback.
