How to change the VAT scheme and set up VAT rates


This article explains how to use the VAT features within Sage 50 Forecasting.


These are the basic steps that explain how to change VAT accounting schemes and set up VAT rates. They include:

Explanation of VAT schemes

To set up a VAT scheme

To change a VAT rate

To apply a VAT rate

Note: Quick steps provide the minimum amount of information you need. For further information, please refer to the Detailed steps or Useful info tabs.

 Explanation of VAT schemes

Sage 50 Forecasting uses the following VAT Accounting schemes:

Invoice Accrual Standard VAT Accounting scheme. Liability arises as invoices are issued or received.
Cash Accounting (VAT in Dr/Dr) Liability araises on issue or receipt of invoices but is not due for payment until the invoice is paid. The same scheme as Sage 50 Accounts VAT Cash Accounting. Trade creditors appear on the balance sheet and are entered in the opening balance sheet inclusive of VAT.
Cash Accounting (Cash Book) Libility arises only when an invoice is paid. Trade creditors and trade debtors appear on the balance sheet and are entered in the opening balance sheet exclusive of VAT.
Annual Accounting Liability arises when invoices are issued or recieved. This scheme accounts for VAT eby making 9 equal monthly payments based on 10% of the previous year’s VAT liability. The balancing payment is made two months after the VAT year end.
Payment on Account Liability arises as invoices are issued or received. This scheme accounts for VAT by making interim payments at the end of the second and third months of each VAT quarter. A balancing payment for the quarter is then made with the VAT return. This scheme only applies to companies with an annual VAT liability in excess of £2,000,000.

 Note: The Balance Sheet shows the total VAT position, not just the VAT due to be paid or refunded.

To set up a VAT scheme

1.       Other Assets/Liabilities > VAT Liability Account Record > VAT Scheme drop-down list > choose a scheme.

2.      Payments/Refunds tab > Entry Method drop-down list > choose the method you want to use > complete the
information as follows:

Calculated entry method:

Opening VAT Liability Enter any opening balance value on the VAT Liability Account.
First Payment Date Select the date, past or future, of the first VAT payment.
Paid / Refunded Every Enter the frequency with which VAT is paid or refunded.
Paid / Refunded Specify the number of months in advance or arrears that VAT is paid or refunded then, choose the required arrangement.
VAT Period Always At Month End To specify whether or not the VAT Period is always at month end, choose Yes or No as required.
First VAT Payment / Receipt If the number of months Advance / Arrears is more than one, enter the value of the first Payment or Receipt.

Enter Payments / Refunds method: In the Opening VAT Liability box, enter any opening balance then in the box

Spreadsheet Click the finder button then in the Select Hotlink Data Source window, click Add, browse to the required spreadsheet, click Open, then click Connect.
Cell Range Specify the Cell Range within the source spreadsheet or, when the Cell Range window appears, select the cells containing your payment or refund data.
Hotlink Range Specify the period to which the hotlink data corresponds.
Hotlink Choose Monthly or Annual values.
Negate Data If you want to convert positive figures to negative or vice versa, choose Yes.

Payments / Refunds data column, enter your payment or refund values per period.

Excel Hotlink entry method: In the Hotlink Details area, complete the information as follows:

To change a VAT rate

Tip: You can change the rates in different forecasts independently.

1. Forecast menu > VAT Rates.
Sage Financial Forecasting v5 – Options > VAT Rates.

2. Create a New VAT Rate > select your new rate > VAT Rate data column > enter a VAT rate per period.

Tip: If you want the new VAT rate to be the default when you create records, select the Default check box.

3. To edit the name of the VAT rate > select then double-click the new VAT rate > enter a new name > click another row.

4. Click Save.

You have now successfully created a new VAT rate and can apply this in your forecast.

To apply a VAT rate

  • Open the required record > VAT Rate drop-down list > choose the required rate > Save.

You have now applied a VAT rate to the record.


Sage Financial Forecasting v5, v12, v2007

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