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Post Info TOPIC: zero rated VAT in QB


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zero rated VAT in QB
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Hi All,

I have not dealt with zero rated VAT before in QB.

 

What would you do in QB to ensure the VAT is accounted for properly?

 

Any help will be much appreciated.

 

Many Thanks

 

Nadia



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Thanks, Nadia.



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Hi. Desktop or Cloud?

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Hi Johnny,

I am using the Desktop version.

 

 



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Thanks, Nadia.



Master Book-keeper

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Isnt there a 'z' code? Cant recall as not used QB for a long time.

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 Joanne 

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Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Guru

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It's to me at least, a very broad question. What do you want to do? Key a purchase invoice, create a zero invoice, create a zero rated report?

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Master Book-keeper

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abacus12345 wrote:

It's to me at least, a very broad question. What do you want to do? Key a purchase invoice, create a zero invoice, create a zero rated report?


 Good point Johnny. I just assumed it was keying invoices/payments (sales/puchases).   Am also assuming it is actually zero rated (UK) rather than exempt or some of the EU 'stuff'.  Maybe we should be told a bit more!biggrin



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Guru

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Apologies all, you are correct, I should have provided a bit more information. It is a UK based company with sales and purchase transactions within the UK. They are VAT registred in UK under the flat rate scheme. They were affected by the recent changes to the scheme as they fall into the 'Limited cost treader' band and will now be liable to pay 16.5% vat on sales rather than previously paying 12%

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Thanks, Nadia.



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Apologies all Reading through my previous post, I made a type in my original question. Note my question relates to flat rate vat postings in qb and not zero rated. Apologies with the confusion - not having a good day

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Thanks, Nadia.



Master Book-keeper

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So, all that has changed is the rate. Or have I missed something/not sure what you want to know. Can you expand further pls

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 Joanne 

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Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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Is it a Limited Company Nadia?  If it is both purchases and sales need to be keyed nett plus 20% VAT if applicable.  You will then need to do a manual VAT return just using the sales figures, as you would have done previously, and do an adjustment in QB to record the extra VAT.

If not a Ltd Company you can either do it that way or (my preferred method) record the purchases including VAT and ldon't key in any VAT.  Again an adjustment in QB to allocate the 0.2% saving to the PL.

 

CAn I ask you, is it not worth reverting to the standard scheme?  At least then you can deduct any business purchases with VAT on



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Master Book-keeper

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v. quick one - I thought QB desktop could handle the FPS scheme? (check via preferences)

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Guru

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Yes it is a limited company I will check the settings in qb - thanks

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Thanks, Nadia.



Master Book-keeper

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Might be handy to know what version (year) of QB it is.

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



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Hi Nadia - if your client is on the Flat Rate Scheme and you use Quickbooks then all the sales and purchase invoices should be entered at their usual VAT rate, you don't need to do anything special apart from the obvious of making sure that the FRS scheme has actually been selected under settings/preferences. It's been a while since I used the desktop version of QB but in QB Online this is under VAT > Edit VAT > VAT Settings, and this is also where you would put in the FRS%.

If you've done this, then when you run the VAT return it will automatically work out the VAT at the FRS% you've entered, and will put the gross sales in Box 6. If your client is a Limited Cost Trader for part of the period you'll need to run 2 separate returns - one at the old % and one at the new 16.5%, then add those together to get the figures to submit to HMRC.
When you reconcile, it will usually enter a journal automatically to account for any gain/loss made under the scheme.

Also it's worth noting that some software like this will annoyingly also include any supplier refunds as a gross sale, and apply the FRS% to it so watch out for these...



-- Edited by fin6y on Monday 15th of May 2017 10:28:48 AM

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