Create a new VAT rate 1. Create a new VAT rate If the 7% rate is not yet set, go to Structure > Tax Rates. Create a new code (e.g., VAT7) and define its characteristics: rate, direction (collected or deductible), title, and associated accounts. 2. Assign the correct accounting accounts When creating the rate, you must link the correct general ledger accounts to ensure correct accounting. This allows Sage to automatically allocate entries according to the applied rate. 3. Set up item categories To avoid future errors, you can associate each item category with a specific VAT rate. This allows Sage to automatically apply the correct rate when entering data.