VAT rates

To keep things simple, when you enter a transaction there are six VAT rates to choose from. You don’t need to worry about maintaining the rates as this is done for you. Simply choose the appropriate VAT rate for your transaction:

  • Standard – 23%
  • Reduced Rate – 13.5%
  • Second Reduced Rate – 9%
  • Zero Rated – 0%
  • Exempt – Transactions are exempt from VAT.
  • No VAT – Transaction is non-vatable.

The VAT rates are maintained automatically, therefore you can’t edit or set up your own.

The following table shows which boxes on the VAT Return are affected by the different rates.

VAT rate Sale or purchase Box
Standard Sale T1
Purchase T2
Reduced Rate Sale T1
Purchase T2
Second Reduced Rate Sale T1
Purchase T2
Zero Rated Sale N/A
Purchase N/A
Exempt Sale N/A
Purchase N/A
No VAT Non-vatable rate, doesn’t appear on the VAT Return.

If you deal with overseas customers or suppliers, the following also applies:

  • If you purchase standard rated goods or services from a VAT registered EU supplier, or from a supplier outside of the EU, the VAT element is included in boxes T1 and T2.
  • The net value of the sale of goods to a VAT registered EU customer appears in box E1.
  • The net value of the purchase of goods from VAT registered EU suppliers appears in box E2.
  • The net value of services supplied to a a VAT registered EU customer appears in box ES1.
  • The net value of services supplied to a a VAT registered EU supplier appears in box ES2.

For more information about how different transaction types affect the VAT Return, please refer to our How the VAT Return calculates.