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Intuit

Create or delete a VAT adjustment

Learn how to adjust your VAT due if you use Automated VAT in QuickBooks Online.

With Automated VAT, it’s easy to keep your VAT records accurate. If you received a tax credit, discount, or fine, you can adjust the VAT you owe. This way you don’t have to worry about making corrections when it’s time to file.

Here’s how to add or delete a VAT adjustment in QuickBooks Online.

Add a VAT adjustment

Step 1: Set up an account for VAT adjustment

It’s important to use the correct account type when adjusting VAT. Set up an expense account if you need to increase your VAT due, or an income account if you need to decrease.

Note: If you already have these accounts, move on to creating the adjustment in Step 2.

  1. Select the Gear icon at the top, then choose Chart of accounts.
  2. Select New at the top right.
  3. From the Account Type dropdown, select Income or Expenses.
    • If you need to decrease your VAT due, set up an income account.
    • If you need to increase your VAT due, set up an expense account.
  4. Select the account’s Detail Type.
    • Use Sales of Product Income for an income account.
    • Use Taxes Paid for an expense account.
  5. Name your adjustment account (for example, "VAT due increase").
  6. Select Save and Close.

Step 2: Add an adjustment

  1. Select Taxes from the left menu.
  2. Find the tax period you need to adjust, then select Prepare return.
  3. Select Adjust against the entry to be adjusted.
  4. Select the Adjustment date and the Tax rate.
  5. Select the Adjustment account for adjusting VAT.
    • Choose an expense account if you need to increase the VATdue.
    • Choose an income account if you need to decrease the VATdue.
  6. Enter the Adjustment amount.
  7. Enter notes in Memo, then select Save.

Delete a VAT adjustment

You can also remove an incorrect VAT due adjustment. After deleting the adjustment, you’ll no longer see it when you review your VAT return on the Taxes screen.

  1. Select the Gear icon at the top, then choose Chart of accounts.
  2. Find the income or expense account you used to add an adjustment.
  3. Select Run report. Note: If the report appears blank, make sure you've selected the correct Report period and run the report again.
  4. Select the adjustment you need to delete and then select Delete.
  5. Select Yes to confirm.

Learn more

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