The following explains which VAT codes to use when processing transactions in Dimensions. Refer to the Dimensions help files for further detail. Always consult HMRC if you are unsure — it is your responsibility to report VAT accurately.
VAT rates
The VAT Rates window is opened from the VAT Rates menu option.
The window contains a list of the UK VAT Rates and EC VAT Rates that exist in the system.
An initial set of VAT rates is created with the database. Confirm they are correct.
The system ships with the current UK VAT rate entered under codes 1, 11, A, R, U, and V. Check these are correct.
You can view and amend the percentage rate for each VAT code, and enter new codes and rates as required.
All rates have a code: most UK VAT Rates use numeric codes; some use letters to indicate their use. EC VAT Rates are identified by letters. Codes 0 and 8 are always zero % and cannot be changed. All other rates can be set between 0.01% and 99.99%.
Code usage
Codes 10, 11, and 12 are used to provide additional reporting for Cash VAT accounting.
Code V is used for Reverse Charge accounting for VAT.
Code X applies to the sale and purchase of services to and from the EU where the supply is subject to VAT.
Code Y applies to the sale and purchase of services to and from the EU where the supply is not subject to VAT.
You can print a list of VAT rates using the VAT Rate List report from the Access Crystal Reports menu.
Note: It is essential to fully understand the type of VAT Rate that is entered into Transactions to ensure that VAT Reports accurately reflect the business.
If unsure, it’s recommended to consult HM Revenue & Customs. It is the user’s responsibility to report VAT accurately.
EC VAT rates
All VAT rates are applicable to EC transactions. EC VAT rates are identified by a code letter indicating their type and usage.
In the VAT Rates window
If a letter appears in the EC column, the VAT rate is for EC tax.
If the EC column is blank, the rate is a GB rate for UK VAT.
The initial set of EC VAT rates (created with the database) use the same code as the EC type, so the code appears repeated in the EC column.
Insert new rates
A prompt asks you to identify the rate type: GB VAT or EC VAT.
Select EC VAT. A prompt asks you to select the EC VAT type appropriate to the rate.
Click Icons and menus.
Click Edit.
Click the icon to change VAT rates and insert new ones.
Selecting a rate in the list displays its percentage value at the bottom of the window, where it can be changed.
Insert a new rate
Click Edit and click the blank entry at the bottom of the VAT Rates list.
Enter a VAT code for the new entry and a VAT rate.
Select the type of VAT rate from the GB VAT menu:
Select GB VAT for sales and purchases to and from UK companies and foreign non-EC companies.
Select EC VAT for sales and purchases to and from EC companies.
There are sub-menus for both types: for GB VAT, select Ordinary or Reverse Charge; for EC VAT, select the VAT type.
Use the General menu to indicate the rate is for a special purpose.
Enter a description for the rate.
Click OK to save.
General
The General menu adds additional context to a VAT code to indicate it is for a special purpose.
The default is General. The menu also includes Sales Invoice, Sales Credit Note, Purchase Invoice, and Purchase Credit Note.
Assigning a transaction type to a VAT rate limits the rates displayed when entering a transaction.
For example, when entering a sales invoice, only VAT rates assigned as Sales Invoice or General are available.
Sort
The Sort menu lets you order the VAT Rates list by Code, Rate, or EC Type.
Inactive icons
The VAT Rates window has two inactive icons to the left of the toolbar. This is correct.
American Version Unlock Key.
In this version, the Rates column heading becomes a menu button with two options: Show Rate Makeup and Define Headings. Define the headings first, then use them to show the makeup of the tax.
EC VAT codes
The following EC VAT codes are used when entering transactions:
Sales Ledger
EC customer with a tax registration number:
G – 0.00% Goods and Related Services.
VAT is not charged to EC customers when their tax registration number is known (entered on the customer record).
S – 0.00% Non-Related Services (may be substituted).
X – EU Reverse Charge VATable Service.
Reverse charge VAT is not calculated for sales transactions. The VAT rate is set to blank and the invoice is annotated to advise the customer they must account for the output tax.
Y – EU Reverse Charge Non-VATable Service.
Reverse charge VAT is not calculated for sales transactions. EC customer with no tax registration number, but the Country record has a Tax Representative number:
T – 0.00% Non-Registered WITH Tax Rep.
VAT is not charged if the customer is not registered but a Tax Representative exists in their country. The Tax Representative number is entered on the Country record for information only. To use VAT code T on a Sales Ledger or Sales Order transaction, enter T as the default VAT code on the customer record.
EC customer with no tax registration number and no Tax Rep number in the Country record:
U – Standard Rate - Non-Registered NO Tax Rep.
If the customer is not registered and no Tax Representative exists in their country, VAT is charged at the standard rate for the goods or services supplied.
SOP
The rules above for Sales Ledger transactions are applied using the VAT status and tax registration from the Delivery Address.
Purchase Ledger / POP
EC supplier with a tax registration number:
A – Standard Rate - Acquisitions of Goods and Related Services.
If you are VAT registered and receiving goods from a tax-registered EC supplier, acquisition tax must be accounted for on the VAT return. Acquisition tax is added to the invoice value and included in the input tax total. It is also shown in Box 2 and added to outputs on the return, so no tax is actually claimed or paid — it is for statistical purposes only. Dimensions defaults to VAT code A for EC suppliers only if the tax registration number has been entered on the Supplier record. If the supplier is known to be tax registered but the number has not been entered, use code A manually when entering the purchase transaction.
X – Standard Rate - Reverse Charge VATable Service.
Reverse Charge VAT (X) updates the VAT return but does not update the Purchase Ledger.
When entering net values, reverse charge VAT is not added to the gross value.
When entering gross values, reverse charge VAT is not deducted from the net value.
You can edit the reverse charge VAT value, but this does not affect the net or gross values. The updated value is applied to the VAT return.
Y – EU Reverse Charge Non-VATable Service.
Reverse charge VAT is not calculated. EC supplier with no tax registration number:
T – 0.00% Non-Registered WITH Tax Representative.
Use code T for suppliers with no tax registration number to ensure VAT is not entered but the transaction is saved as an EC transaction. 📌 Note: If tax is charged by the supplier, enter it as part of the net value of the transaction — not as VAT. VAT is UK tax only.