VAT Rate Change to 23%
On March 1st 2021 the standard rate of VAT in Ireland will be increased from 21% to 23%. This will involve reverting back to the vat rate used prior to September 1st 2020. The support team at Synergy Network is here to help you prepare your Sage 50 accounts package in advance for the VAT Rate change from 21% to 23%. Read on!
Recommended Tax Rate set up
We recommend that all clients check for pre -existing Tax Codes in Sage 50
- 23% for Sales and Purchases for resale,
- 23% for Purchases Not For Resale.
- Configuration Editor
- Tax Codes
Make sure that “In Use” is ticked
EU Purchases and Postponed Accounting Tax Codes
- In the “Link” to section, change to 23%, the new standard rate
- To keep changes, click OK
- Apply to keep changes in Configuration Editor if using Sage 50 Accounts while in Sage 50 Essentials use the Save option.
Outstanding Orders and Invoices
- Ensure that Invoices that include the Standard Rate of VAT at 21% with dates up to and including February 28th are posted
- All Invoices with date from the 1st March should be updated with the new standard rate of 23% ie edit item lines to choose your new VAT rate
- For any Sales or Purchase Orders outstanding to February 28th inclusive that are updated from the 1st March, ensure first that the standard tax codes are changed to the new 23% rate before posting.
Customer, Supplier and Product Records
Default Tax codes are held in the Customer, Supplier and Product records, if you need to change the tax codes for some or all of your records the approach will depend on the Sage version you have.
- If you are using Sage Essentials each record affected needs to be individually edited to change the tax code and saved
- In Sage 50 Accounts Standard and Professional, you can use the Batch changes option to amend a large number of records at the same time. Batch Changes option in Customer, Products and Suppliers module example below:
- If you use Add-On software to import transactions into Sage 50 Accounts, you may need to update the rules/settings in that software to include your new reduced VAT rate.
- If you have any recurring Invoices or Payments set up, check them all for standard rate of VAT. Edit to change the rate to 23%
We hope that you find this information useful. If you have any queries please contact our Support Team at (071) 9146815