VAT rates

How VAT rates are set up and used in Accounting. There are six pre-set VAT rates to choose from. Simply choose the appropriate VAT rate for your transaction.

When the VAT rates change or a new VAT rate is required, we will create a=nd maintain the rates for you.

Available VAT rates

  • 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.

VAT rates and the VAT return

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.

Change the VAT rate on a ledger account

Each holds a default VAT rate to save you from having to select the correct rate each time you use it. It's simple to change the default.

Note: Changing the default rate won't make any change to existing transactions. They'll remain with the rates set at the time of their creation.

  1. Select Settings, then Business Settings, then Chart of Accounts.
  2. Use the search to find the to change.
  3. Select the required .
  4. Choose the VAT rate to use from the VAT Rate drop-down.