Carriage

This code records costs relating to carriage. As a cost account, it normally carries a debit balance: debit entries increase the balance (recording new costs) and credit entries decrease it (for example, a credit note received from a supplier).

Real-world examples

Importer or wholesaler (international freight)

A wholesaler pays a freight forwarder to bring a container of stock into the UK from an overseas supplier. The international leg of that transport is normally zero-rated for VAT, so the freight element of a £2,000 invoice can carry no VAT at all — though forwarders often add a standard-rated handling or agency fee alongside the zero-rated freight on the same invoice, so each line is worth checking rather than assuming the whole thing is VAT-free.

Domestic retail / e-commerce

A retailer pays a UK parcel courier to move stock between its own warehouses, invoiced at £660 (£550 net). This is an ordinary UK-to-UK courier service and is standard-rated: a debit of £550 to 5100 (Carriage), a debit of £110 to 2201, and a credit of £660 to 2100 — the straightforward pattern that applies whenever both the carrier and the business are UK-based.

Commonly confused with

Because code 5101 (Import Duty) sits right next to this one in Purchases & Direct Costs, it's a common mis-posting target. Code 5100 is specifically for carriage, while 5101 covers import duty — similar in nature, but keeping them separate is what makes the purchases & direct costs section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

Posting to the wrong cost code here won't change total cost of sales, but it will distort gross margin analysis by category, making it harder to see which input costs are actually rising.

Other codes in Purchases & Direct Costs