Setting up VAT codes

VAT codes are used to track VAT paid to and by your business. Each VAT code represents a particular type of VAT, which is used to calculate VAT on your transactions.

AccountEdge software has a list of VAT codes that can be used in a variety of situations—for example, when doing business with EC customers or when tracking capital acquisitions and so on. You can also create an unlimited number of VAT codes. For more information on setting up VAT codes for EC sales and EC purchases, see EC sales and EC purchases.

To add a VAT code

1	Go to the Lists menu and choose VAT Codes. A list of VAT codes appears.

2	Click New. The VAT Code Information window appears.

3	In the VAT Code field, type a VAT code (consisting of one, two or three characters) and press Tab.

4	Complete the Description, VAT Type and Rate fields.

5	Click OK when you have finished. The new VAT code you have added will now appear in the VAT codes list.

Assigning VAT codes to accounts

You can assign a VAT code to each account in your accounts list. The VAT code you assign to an account will appear as the default VAT code in a transaction where you allocate a deposit, cheque, or a non-item sale or purchase to this account.

For example, you have assigned the VAT code to your Electricity expense account. When you write a cheque to settle your electricity bill in the Spend Money window and allocate it to this account, the VAT code will appear in this window by default.

You can allocate a VAT code to an account in the Edit Accounts window. You can open this window by going to the Accounts command centre, clicking Accounts List, and double-clicking the required account from the list. For more information, click Help and choose Help for This Window or Tell Me More.

Assigning VAT codes to items

When you set up your items, you must assign a VAT code to each of them.

You can assign a VAT code to be used when you sell an item and a VAT code to be used when you buy an item. That VAT code will appear as the default in sales and purchases of that item unless you have specified that the customer’s or supplier’s VAT code be used instead (see ‘Assigning VAT codes to cards’ below).

VAT codes are assigned to items in the Buying and Selling tabs of the Item Information window. For more information, see To create an item.

Assigning VAT codes to cards

You can select a default VAT code for a customer or supplier. You would only need to specify a default VAT code if the customer’s or supplier’s VAT status takes precedence over that of the item or service being sold or purchased.

When you create a quote, order, or invoice, your software will use the VAT code assigned to the customer as the default. This VAT code will override the item’s VAT code in an item sale, and the allocation account’s VAT code in a non-item sale.

Similarly, when you create a quote, order or purchase, your software will use the VAT code assigned to the supplier as the default. This VAT code will override the item’s VAT code in an item purchase, and the allocation account’s VAT code in a non-item purchase.

VAT codes are assigned to customers in the Selling Details tab of their Card Information window (see Creating a customer card).

VAT codes are assigned to suppliers in the Buying Details tab of their Card Information window (see Creating a supplier card).

Make sure you select the Use Supplier’s VAT Code option. (If this option is not selected, your software will not use the supplier’s VAT code, even if one has been assigned.