VAT Overview

If your business is VAT registered, you must submit regular VAT Returns to Revenue. These summarise your sales and purchases for the period and any VAT you need to pay or reclaim. It’s important that your VAT Returns are accurate, to ensure that you pay what’s due. Not paying enough VAT can result in penalties.

We’ve gathered together everything you need to help you to make sure that your settings and the transactions you post are correct. So you can submit your VAT Returns with confidence.

VAT schemes and settings

Setting up your VAT scheme

You select your VAT scheme when you sign up and enter your basic company information.

The following VAT schemes are available:

  • Invoice basis.
  • Cash basis.

If your company’s not VAT registered, you should choose Not Registered.

VAT settings

To check or enter the following VAT settings, go to Settings, then click Accounting Dates & VAT.

  • VAT scheme.
  • Your registered VAT number.
  • Submission frequency – If you’re VAT registered you need to submit a VAT Return at regular intervals. You can choose every two months, every four months, every six months or once a year, depending on your registration with Revenue.

Changing your VAT scheme

There may be a time when you need to change VAT schemes, for example, because you’ve reached a turnover threshold or because a different scheme would be more beneficial to your business.

Working with VAT

Which VAT rates to use

Depending on what you buy or sell, there are several different VAT rates which might apply. For example, the standard rate of 23% or a zero VAT rate. Some transactions are also outside the scope of VAT altogether.

Trading within the EU

If you deal with VAT registered customers and suppliers in the EU, you must enter a valid VAT number. You can use the EC Sales Analysis report to help you complete your VIES Return for Revenue.

The VAT Return

Create and submit a VAT Return

You need to create and submit a return to Revenue every two months, every four months, every six months or once a year.

Sage automatically calculates VAT due depending on your VAT scheme and the rates you choose when entering your transactions. You can find out more about how each value on the return calculates.

Recording VAT payments and refunds

Once you’ve successfully created and submitted your VAT Return, to clear your VAT liability you need to record the payment of VAT to Revenue or, if applicable, the amount of VAT you’ve reclaimed.