Sales Types A-E Explained: Codes 4000, 4001, 4002, 4100 & 4101

Sage's default chart of accounts gives a business five generic sales codes to start from — Types A through E — rather than trying to guess in advance what a particular business actually sells.

The codes, and what each one holds

Code 4000 — Sales Type A, 4001 — Sales Type B and 4002 — Sales Type C sit together as the first block of general sales codes, while 4100 — Sales Type D and 4101 — Sales Type E form a second block. In practice, businesses rename these to match their own product lines, sales regions, or VAT rates — for example splitting standard-rated sales from zero-rated sales. All five are Sales codes and normally carry a credit balance.

Real-world examples across industries

Hospitality (pub or restaurant)

A pub or restaurant repurposes 4000 for food sales and 4001 for drinks, since drinks typically run at a much higher margin and the split matters for pricing and stock decisions. A day's food takings of £840 (£700 net) post as a debit of £840 to 1200 (till/bank), a credit of £700 to 4000, and a credit of £140 to 2200 (Sales Tax Control Account); a day's drink takings of £600 (£500 net) follow the same pattern into 4001 — a debit of £600 to 1200, a credit of £500 to 4001, and a credit of £100 to 2200. There's no fixed meaning to "Sales Type A" or "B" in Sage's default chart of accounts — they're spare income slots businesses relabel to suit how they want revenue reported.

Construction

A building contractor works on both new-build housing and repair or maintenance jobs, which are taxed completely differently — constructing a new dwelling is normally zero-rated for VAT, while repair and maintenance work is standard-rated at 20%. Repurposing 4100 for new-build sales and 4002 for repairs makes the VAT treatment easy to check at a glance: a zero-rated new-build invoice for £18,000 posts as a debit of £18,000 to 1100 (Debtors Control Account) and a credit of £18,000 to 4100, with nothing posted to 2200; a repair invoice of the same value carries £3,600 of VAT on top — a debit of £21,600 to 1100, a credit of £18,000 to 4002, and a credit of £3,600 to 2200.

Training and education

A training provider repurposes 4101 for accredited qualifications, where fees can be VAT-exempt if the provider qualifies as an "eligible body", and keeps 4000 for short, non-accredited workshops, which are standard-rated. A £1,200 fee for a VAT-exempt accredited course is a debit of £1,200 to 1100 and a credit of £1,200 to 4101, with nothing posted to 2200; a £1,200 workshop fee instead carries VAT: a debit of £1,440 to 1100, a credit of £1,200 to 4000, and a credit of £240 to 2200. Keeping the two apart matters as much for the VAT return as for reporting which side of the business is actually growing.

Why this matters day to day

Leaving everything in a single generic sales code makes it impossible to see which part of the business is actually growing, and it also makes VAT return preparation harder if different products carry different VAT treatments. Renaming these codes early, before too many transactions have been posted, is one of the easiest wins when setting up a new Sage company.