A mixed VAT bill has lines at different VAT treatments, such as standard rate 20%, reduced rate 5%, zero-rated, exempt or outside the scope of VAT. Each line needs its own VAT code. Some construction services use the domestic reverse charge instead.
Before you start
- Sage 50 Accounts (UK)
The Sage 50 way
Where to find it: Suppliers > Batch invoice (T/C column); Settings > Configuration > Tax Codes
- Open Suppliers > Batch invoice and enter each line with its own nominal code, net amount and tax code in the T/C column.
- Use the default UK codes: T1 standard rate, T5 lower rate (5%), T0 zero rated, T2 exempt and T9 transactions not involving VAT (outside the scope of VAT).
- For construction work under the domestic reverse charge use T21 (standard rate) or T26 (reduced rate) in Sage 50cloud Accounts v26 and later. Enter only the net amount.
- Check the VAT amount on each line before saving.
- If a code does not behave as expected open Settings > Configuration > Tax Codes. Each code has a rate, an Include in VAT Return box and a Reverse Charge box.
Limits in Sage 50
- Older Sage versions need you to create the construction reverse charge codes yourself. Link the standard one to T1 and the reduced one to T5, and tick Reverse Charge.
- The Reverse Charge tick box on a tax code is meant for carousel fraud items such as mobile phones in the older Sage help. Use the T21 and T26 construction codes for the construction reverse charge.
- Tax code behaviour was read from older Sage help and a Sage City reply. Check the current Configuration Editor in your version.
Good to know in Sage 50
- With T21 the VAT is worked out for you. The supplier net value goes to box 7 on your VAT Return and the VAT goes to boxes 1 and 4, so you pay and reclaim it on the same return.
- VAT cash accounting and the Flat Rate scheme do not apply to reverse charge transactions coded T21.
- You can have up to 99 tax codes.
Words Sage 50 uses
- Nominal code. The UK name for a general ledger account.
- Batch invoice. A window that lets you enter many supplier invoices in one go.
The Pulsify way
- Forward the supplier's invoice to your Pulsify address or upload it. Pulsify reads every line and finds the supplier in Sage 50.
- Pulsify sets a tax code on each line from the VAT rate printed on that line, matched to a tax code in Sage 50.
- Check any line where the invoice is unclear, such as zero-rated against exempt. Change the VAT code (T-code) and approve.
- The purchase invoice is created in Sage 50 with the VAT code on each line.
Pulsify connects to Sage 50. We set up the connection for you.
What Pulsify does not do here
- Pulsify does not decide if the domestic reverse charge applies. Pick the reverse charge code yourself in the review screen.
- A VAT rate on the invoice that has no matching tax code in Sage 50 is flagged. Add or choose the code before you approve.
Example in Sage 50
Example Groundworks Ltd sends one purchase invoice in GBP. The groundworks fall under the domestic reverse charge. Amounts are net of VAT.
| Line | Amount | Tagged to |
|---|---|---|
| Groundworks labour and materials | £2,000.00 | T/C T21 (reverse charge standard rate), notional VAT £400.00 |
| Printed site plans | £50.00 | T/C T0 (zero rated), VAT £0.00 |
| Site parking permit | £30.00 | T/C T9 (not involving VAT), VAT £0.00 |
Pay the supplier £2,080.00 because no VAT is charged on the invoice. The £400.00 reverse charge VAT shows in boxes 1 and 4 of your VAT Return and the groundworks net value shows in box 7.
Common mistakes
- Entering the whole invoice on T1 when some lines are zero rated, exempt or outside the scope of VAT.
- Using T20 for the construction reverse charge. Sage names T21 and T26 for it in version 26 and later.
More help
- How to code a bill with mixed GST lines in AccountRight
- How to code a bill with mixed GST lines in MYOB Business
- How to code a bill with mixed GST lines in Xero
- How to enter a purchase invoice with line items in Sage 50
- How to check VAT coding on purchase invoice records in Sage 50 before you send your VAT Return
- How to code one purchase invoice to several nominal codes in Sage 50
- All Sage 50 how-to guides
- Pulsify setup guides
Sources
Last checked 2026-10-19. Confidence: partial.
- gb-kb.sage.com/portal/app/portlets/results/viewsolution.jsp?solutionid=200427112519282&hypermediatext=null
- sage-docs-help-rebrand.s3-website-us-east-1.amazonaws.com/Sage-50-Accounts-WebHelp-Grey/content/settings_and_tools/configuration_editor/configuration%20editor%20-%20tax%20codes.htm
- www.sagecity.com/gb/sage-50-accounts-and-sage-50cloud-accounts-uk/f/sage-50-accounts-and-sage-50cloud-accounts-uk-general-discussion/131672/domestic-reverse-charge-vat-construction-industry
- communityhub.sage.com/gb/sage-50-accounts/f/general-discussion-uk/165037/vat-reverse-charge
- www.construction-manager-software.co.uk/wp-content/uploads/2023/04/1.How-to-configure-VAT-codes-if-using-Version-25-or-earlier-of-Sage-50-Accounts.pdf
Common questions
How do I put different VAT rates on lines of one purchase invoice in Sage 50?
Enter each line with its own tax code in the T/C column of Batch invoice. For example T1 for standard rate, T5 for the 5% lower rate and T0 for zero rated. Check the VAT on each line before you save.
Which tax code is the domestic reverse charge for construction?
In Sage 50cloud Accounts v26 and later use T21 for the standard rate and T26 for the reduced rate. In older versions you create the codes and tick Reverse Charge. Link them to T1 and T5.
Which code do I use for something outside the scope of VAT?
T9 is the default code for transactions not involving VAT. Use T2 for exempt supplies and T0 for zero rated ones, because those are different treatments on the VAT Return.
Pulsify setup guides
Want this done for you?
Book a call to see how Pulsify handles supplier bills in Sage 50.