[Question] Explanation of tax codes (for a non-accountant)

[michellepace]

Hi there,

Below are the tax codes which I get by default after setting up a new company. What I don't understand is - what would we want different tax codes when all the percentages are the same? For example, why don't I just have a tax code called "Standard VAT 15%" and that is it. What use is it for my accountant come end of financial year to have a tax report broken down by code?



Ever learning, .. thank you.
Michelle.

[dellatjie]

Hi Michelle,

The purpose if the different tax types are that you have to complete some items on different places of the VAT return. For example capital goods.


Sent from my iPhone using Tapatalk

[michellepace]

Thank you very much, that makes complete sense. Could I ask someone to please make a screenshot of their tax table which is relevant for vat returns for a small business ? I see the defaults in the demo company but I’m not sure if the tax types are perhaps a bit out dated.

Lastly we also have “customs vat” which is at a rate of 100%. Would I create a tax type for this in my pastel?

[dellatjie]

It totally depends on the type of business. If it were a guesthouse, I would leave accommodation there. If you sold fuel or bread, I would leave zero rated there, for example.


Sent from my iPhone using Tapatalk