HOW-TO

How to check VAT coding on purchase invoice records in Sage 50 before you send your VAT Return

Short answer

In Sage 50, run the VAT report by VAT code (T-code) for the period. Review large bills, new suppliers and reverse charge items, fix wrong VAT code (T-code) entries and check you hold a VAT invoice for each reclaim.

Last checked

A pre-VAT Return check means reviewing bills for wrong VAT codes, missing VAT invoices and suppliers without a valid VAT number before you reclaim VAT. Under Making Tax Digital the return is sent from software.

Before you start

  • Sage 50 Accounts (UK or Ireland)

The Sage 50 way

Where to find it: VAT > VAT Return (wizard), and the Accounts audit option

  1. Run the Accounts audit option to check purchases posted with a non-standard tax code before the return.
  2. Check purchases from construction subcontractors. Domestic reverse charge lines should use T21 (standard rate) or T26 (reduced rate), not T1.
  3. Go to VAT > VAT Return (wizard) and calculate the return. Verification checks run automatically.
  4. Open the verification results, review flagged transactions and export to Excel if needed.
  5. The VAT audit check can also be run at any time without calculating the return.
  6. When the figures are right submit the VAT Return to HMRC from the software under Making Tax Digital.

Limits in Sage 50

  • Checks flag items needing attention. They do not say a transaction is wrong.
  • The checks are optional and can be switched off if they are not relevant to your data.
  • The verification checks may add time to the VAT calculation.

Good to know in Sage 50

  • Sage ran this as a VAT sessions series in 2024. Session 5 covers the verification checks and session 2 covers preparing and reconciling the VAT Return.

The Pulsify way

  1. Forward bills to Pulsify through the period.
  2. Pulsify sets a tax code on each line from the VAT rate printed on that line.
  3. Pulsify flags a supplier VAT number that is missing or differs from the supplier record.
  4. Review flags before approval, so fewer errors reach Sage 50.

Pulsify connects to Sage 50. We set up the connection for you.

What Pulsify does not do here

  • Pulsify does not prepare or send your VAT Return.
  • It does not check bills already in Sage 50.

Common mistakes

  • Treating a flagged item as an error without looking at the transaction.
  • Leaving the verification checks switched off.

More help

Sources

Last checked 2026-10-19. Confidence: confirmed.

Common questions

How do I check tax coding before the VAT Return in Sage 50?

Run the Accounts audit option to check purchases posted with a non-standard tax code. Then go to VAT > VAT Return, calculate the return and let the verification checks run.

What do the VAT verification checks tell me?

Open the verification results, review the flagged transactions and export to Excel if needed. Checks flag items needing attention. They do not say a transaction is wrong.

Can I run the VAT check without the return?

Yes. The VAT audit check can be run at any time without calculating the return. Checks can be switched off, so confirm yours are on.

Pulsify setup guides

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