What is the difference between the T20 and T21 tax codes? Used for both sales and purchases?

Hi,

I have been using the T21 Tax Code (CIS Reverse Charge - Standard Rate) for any sales invoices going out and any purchase invoices coming in wherever the Reverse charge applies.  Is this correct, do I use the same code for sales and purchase invoices?

Also, there is the T20 Tax Code (Domestic Reverse Charge) - What is this used for?

What is the difference between the T20 and T21, is there circumstances for when one should be used and when the other should be used?

Any help would be appreciated, I have googled and googled and can't quite find a straight answer! 

Thanks

G

  • Hi Graeme,

    T21 is the tax code for the CIS domestic reverse charge.  This is the tax code which was introduced due to the legislation changes in March 2021.  By default, the new tax codes that are created are: 

    T21 - where CIS Reverse Charge Standard Rate applies.
    T26 - where CIS Reverse Charge Reduced Rate applies.

    The T20 tax code is used if you trade in mobile phones or computer chips, with other UK VAT registered companies as part of trading or for business use.  If the amount of these goods exceeds £5000 on an invoice, you would account for reverse charge VAT using the T20 tax code.

    Further details on the T20 tax code is in this guide: https://gb-kb.sage.com/portal/app/portlets/results/viewsolution.jsp?solutionid=200427112216336.

    I hope this helps.

    Kind regards,

    Rachael